The Department of Health and Human Services' Office of Inspector
General today announced eight new final regulatory "safe harbors" to the
federal anti-kickback statute, which prohibits the knowing payment of
anything of value to influence referral of federal health care program
business, including Medicare and Medicaid.
The new safe harbors, which protect certain arrangements from
prosecution under the anti-kickback statute, address the following payment
or business practices: investments in underserved areas; practitioner
recruitment in underserved areas; obstetrical malpractice insurance
subsidies for underserved areas; sales of physician practices to hospitals
in underserved areas; investments in ambulatory surgical centers;
investments in group practices; referral arrangements for specialty
services; and cooperative hospital service organizations.
"These new safe harbors reflect our desire to accommodate the
legitimate concerns of the industry and to promote the effective and
efficient delivery of health care services to federal health care program
beneficiaries," Inspector General June Gibbs Brown said. "The final
regulation responds to many of the concerns raised by the industry in
response to our original proposals, as well as our annual solicitation for
new safe harbor suggestions."
On the books since 1972, the federal anti-kickback law prohibits
anyone from knowingly and willfully receiving or paying anything of value
to influence the referral of federal health care program business.
Violations of the law are punishable by up to five years in prison,
criminal fines up to $25,000, administrative civil money penalties up to
$50,000, and exclusion from participation in federal health care programs.
"The federal anti-kickback statute is the guarantor of objective
medical advice for federal health care program beneficiaries and helps
ensure that providers refer patients based on the patients' best medical
interests and not because the providers stand to profit from the referral,"
Brown said.
Because the law is broad on its face, concerns arose among health
care providers that some relatively innocuous -- and in some cases even
beneficial -- commercial arrangements are prohibited by the anti-kickback
law. Responding to these concerns, Congress in 1987 authorized the
Department to issue regulations designating specific safe harbors for
various payment and business practices that, while potentially prohibited
by the law, would not be prosecuted.
The Office of Inspector General has previously published 13
regulatory safe harbors, 11 in 1991 and two in 1992. A new final rule scheduled for
publication in the Nov. 19, 1999, Federal Register will establish eight new
safe harbor provisions and clarify six of the original 11 safe harbors
published in 1991. Additionally, an interim final rule establishing two
additional safe harbors for shared-risk arrangements is scheduled for
publication in the Nov. 19, 1999, Federal Register. Both rules went on
public display today at the Federal Register. After the new rules are
published in the Federal Register, there will be a total of 23 regulatory
safe harbors consolidated in the Code of Federal Regulations in 21
subparagraphs.
The 1991 safe harbors addressed the following types of business or
payment practices: investments in large publicly held health care
companies; investments in small health care joint ventures; space rental;
equipment rental; personal services and management contracts; sales of
retiring physicians' practices to other physicians; referral services;
warranties; discounts; employee compensation; group purchasing
organizations; and waivers of Medicare Part A inpatient cost-sharing
amounts. The 1992 interim final safe harbors, which were issued in final
form in 1996, addressed the following practices in managed care settings:
increased coverage, reduced cost-sharing amounts, or reduced premium
amounts offered by health plans to beneficiaries; and price reductions
offered to health plans by providers.
The new final rule clarifies aspects of the original safe harbors
for large and small entity investments; space rental; equipment rental;
personal services and management contracts; referral services; and
discounts. The intent of the clarifications is to make the regulations
easier for the industry to understand and apply to particular factual
circumstances.
Note: A fact sheet highlighting aspects of the new regulatory safe harbors
is available on the Office of Inspector General Web site at
www.hhs.gov/oig. Click on "What's New" to access the fact sheet. After
the new rules are published in the Federal Register, scheduled for Nov. 19,
1999, the rules will be available on the Office of Inspector General Web
site.
