• OIG Issues Proposed Rule Affecting Safe Harbors and Civil Monetary Penalty Rules
  • October 9, 2014
  • Law Firm: GrayRobinson, P.A. - Orlando Office
  • On October 3, 2014, the Office of the Inspector General ("OIG") of the Department of Health and Human Services ("HHS") issued a proposed rule ("Proposed Rule") that revises and expands on safe harbors to the federal Anti-kickback Statute ("AKS"), as well as the Civil Monetary Penalty ("CMP") rule, primarily regarding beneficiary inducements. The Proposed Rule addresses a number of subjects, including cost-sharing waivers and local transportation. Several of these proposed changes are pursuant to statutory amendments. Comments to the Proposed Rule must be delivered to the OIG by 5:00PM on December 2, 2014. This elert is a partial summary and addresses only certain portions of the Proposed Rule.

    AKS Safe Harbors

    The Proposed Rule modifies and adds certain safe harbors including, without limitation, arrangements for certain cost-sharing waivers, remuneration between Medicare Advantage organizations and federally qualified health centers, and local transportation services that meet certain criteria. Some of these proposed safe harbors are discussed in summary fashion below.

    Part D Cost-Sharing Waivers by Pharmacies

    The OIG proposes a new safe harbor protecting certain Part D cost-sharing waivers by pharmacies. Such waivers cannot be advertised or solicited, cannot be provided routinely, and must be based on need. Certain other conditions and exceptions apply.

    Cost-Sharing Waivers for Emergency Ambulance Services

    The OIG has proposed a safe harbor for certain of these arrangements, partially motivated by a number of requests for advisory opinions. The proposed safe harbor would apply only to ambulance providers or suppliers owned and operated by a State, a political subdivision of a State, or a federally recognized Indian tribe, that are the Medicare Part B provider or supplier of the emergency ambulance services. Among other requirements, the waiver would have to be offered on a uniform basis to patients, and the waiver cannot later be claimed as bad debt. The OIG has requested comments on various aspects of this proposed safe harbor, including additional or different safeguards against fraud, waste and abuse.

    Local Transportation

    These arrangements have been the subject of a number of bulletins and advisory opinions issued by the OIG. The OIG has proposed a new safe harbor to protect free or discounted local transportation services provided to federal healthcare beneficiaries. The proposed safe harbor for these arrangements contains several required elements, which include the following:

    • The availability of the free or discounted local transportation services is not determined in a manner related to the past or anticipated volume or value of Federal health care program business;
    • The free or discounted local transportation services do not take the form of air, luxury, or ambulance-level transportation;
    • The free or discounted local transportation services are not marketed or advertised, no marketing of health care items and services occurs during the course of the transportation or at any time by drivers who provide the transportation, and drivers or others arranging for the transportation are not paid on a per-beneficiary transported basis;
      • The Eligible Entity that makes the free or discounted transportation available furnishes the services only:
        To the established patient (and, if needed, a person to assist the patient) to obtain medically necessary items or services, and
      • Within the local area of the health care provider or supplier to which the patient would be transported;
    • The Eligible Entity that makes the transportation available bears the costs of the free or discounted local transportation services and does not shift the burden of these costs onto Medicare, a State health care program, other payers, or individuals.

    An ''Eligible Entity'' is any individual or entity, except for individuals or entities (or family members or others acting on their behalf) that primarily supply health care items; and if the distance from the patient's location to the provider or supplier to which the patient would be transported is no more than 25 miles, the transportation is deemed to be local. The OIG has requested comments on various aspects of the proposed safe harbor, including but not limited to the type of transportation provided, the types of providers that may provide transportation services, the limitation to established patients, and the area in which transportation services may be provided.

    CMP Rules

    The Proposed Rule would add four new exceptions to the term "remuneration" for purposes of the beneficiary inducement prohibition provisions of the CMP Rules. These exceptions would be, in summary, as follows:

    • A reduction in the copayment amount for certain covered hospital outpatient department services;
    • The offer or transfer of items or services for free or less than fair market value by a person if-
      • The items or services consist of coupons, rebates, or other rewards from a retailer;
      • The items or services are offered or transferred on equal terms available to the general public, regardless of health insurance status; and
      • The offer or transfer of the items or services is not tied to the provision of other items or services reimbursed in whole or in part by Medicare or a State health care program;
    • The offer or transfer of items or services for free or less than fair market value by a person, if-
      • The items or services are not offered as part of any advertisement or solicitation;
      • The offer or transfer of the items or services is not tied to the provision of other items or services reimbursed in whole or in part by Medicare or a State health care program;
      • There is a reasonable connection between the items or services and the medical care of the individual; and
      • The person provides the items or services after determining in good faith that the individual is in financial need;
    • Waivers by a sponsor of a Prescription Drug Plan under part D of Medicare or a Medicare Advantage organization offering an MA-PD Plan under part C of such title of any copayment for the first fill of a covered Part D drug that is a generic drug for individuals enrolled in the Prescription Drug Plan or MA-PD Plan, respectively, as long as such waivers are included in the benefit design package submitted to CMS.

    The OIG also discusses in comments to the Proposed Rule a statutory exception to the beneficiary inducement prohibition for "any other remuneration which promotes access to care and poses a low risk of harm to patients and Federal health care programs." The OIG does not provide regulatory text for this exception in the Proposed Rule, but is soliciting public comment regarding regulations implementing this exception. For example, the OIG is requesting comments on how to properly determine what will "promote access to care" for purposes of this exception, whether to look at individual beneficiaries only or groups of beneficiaries (such as beneficiaries in a network or under a designated care protocol), and whether to interpret "access to care" as including non-clinical services that are reasonably related to a patient's medical care.

    Finally, the Proposed Rule adopts as a rule the statutory provisions of the CMP that prohibit gainsharing, i.e., the prohibition on hospitals providing payment to physicians as an inducement to reduce or limit services provided to Medicare or Medicaid eligible patients. In its comments to the Proposed Rule, the OIG notes that it has provided favorable advisory opinions on 16 gainsharing arrangements, noting that not all changes in practice patterns necessarily constitute a reduction in services. The OIG also solicits public comments on a number of considerations for potential future rulemaking to interpret and apply the gainsharing prohibition, based in part on the considerations found in certain of the favorable advisory opinions previously mentioned.