OIG releases eight new safe harbor
The Department of Health and Human Services’ Office of Inspector General (OIG) recently announced eight 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.
Hospices and nursing homes have been the target of OIG scrutiny. These safe harbors, which apply to all segments of the health care industry, offer some guidance to hospices and nursing homes.
In its compliance program guidelines for hospices, the OIG paid particular attention to the relationship between hospices and nursing homes. Specifically, the compliance programs guidelines directed hospice officials from striking deals with nursing homes that call for the hospice to pay more for services than others, or be paid less for services provided than others.
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;
- 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, beneficial commercial arrangements are prohibited by the anti-kickback law. In response to these concerns, in 1987 Congress authorized the department to issue regulations designating specific safe harbors for various payments and business practices that, while potentially prohibited by the law, would not be prosecuted.
The OIG has previously published 13 regulatory safe harbors, 11 in 1991 and two in 1992. The latest safe harbors were published in Nov. 19, 1999, Federal Register and also provides clarification on six of the original 11 safe harbors published in 1991.
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.
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