OIG Releases Proposed Rule on New and Amended Anti-Kickback Safe Harbors and CMP Exception.
Date posted: October 24, 2019
The Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently published a proposed rule to modify and add new protections under the federal Anti-Kickback Statute (AKS) and codify a new Civil Monetary Penalty law (CMP) exception for beneficiary inducements related to healthcare system improvements. The proposed rule is part of the broader HHS Regulatory Sprint to Coordinated Care. This is an initiative that aims to transition the healthcare system to one that coordinates patient care across many providers and encourages quality and value of outcomes rather than volume of care. As such, the proposed rule attempts to remove potential barriers to more effective coordination, management, and delivery of value-based care that improves quality of care and health outcomes. The OIG initially released a Request for Information (RFI) on this topic in August 2018 and it received 359 comments in response. Those responses and discussion with the Centers for Medicare and Medicaid Services (CMS) regarding its proposed Stark Law related regulatory changes inform the OIG’s proposed reforms. The proposed rule offers amendments, new provisions, and alternative regulatory pathways to AKS and CMP protections, while providing additional guidance on some existing protections. Additionally, the OIG is soliciting further comments from industry members on specific AKS and CMP topics related to health system improvements.
The OIG proposes the following additions or amendments to the AKS safe-harbors:
Value-Based Agreement Safe Harbors
The OIG proposes three new safe harbors for certain remuneration exchanged between or among participants in value-based arrangements that foster better coordinated and managed patient care. For the purposes of these safe harbors, the OIG defines “value-based enterprise” (VBE) as a “network of individuals and entities that collaborate together to achieve one or more value-based purposes.” Such purposes include: coordinating, managing, and improving the care of a VBE defined target patient population; appropriate cost reductions; or transitioning to healthcare delivery and payment mechanisms based on the quality of care and control of costs of care for a target patient population. Further, a VBE participant is “an individual or entity that engages in at least one value-based activity as part of a value-based enterprise.” The OIG proposes that pharmaceutical manufacturers, manufacturers, distributors, or suppliers of durable medical equipment, prosthetics, orthotics or supplies (DMEPOS), and laboratories would not be considered as VBE participants. An arrangement must meet all conditions of a safe harbor to ensure protection. However, the OIG reminds applicable parties that “depending on the facts and circumstances, an arrangement may comply with fraud and abuse laws absent specific safe harbor.”
Care Coordination Arrangements to Improve Quality, Health Outcomes, and Efficiency
This proposed safe harbor would allow qualifying value-based enterprise (VBE) participants to provide in-kind remunerations for value-based arrangements that satisfy all proposed safe harbor requirements. Eligible arrangements must meet the following stipulations to receive protection under the safe harbor:
(1) The arrangement must establish one or more evidence-based and valid outcome measure against which the recipient of the remuneration would be measured and which the parties anticipate will advance care coordination and management;
(2) The arrangement must be commercially reasonable, considering both the arrangement itself and all value-based arrangements within the VBE;
(3) The arrangement must be in writing;
(4) Only in-kind remuneration would be protected, not monetary remuneration, and the remuneration must be used primarily to engage in valued-based activities connected to coordination and management of the target population’s care;
(5) The offer does not consider volume or value of referrals both within the arrangement’s target population and outside the target population;
(6) The recipient of the remuneration is obligated to contribute 15 percent of the offeror’s cost of the in-kind remuneration;
(7) The arrangement should be directly connected to value-based care efforts, should not limit the parties’ ability to make decisions in the best interest of their patients, and should not include marketing items or services to patients or patient recruitment activities;
(8) The VBE must conduct monitoring and assessment of the arrangement at least once a year;
(9) The arrangement is not protected if the offeror knows or should know that the remuneration is likely to be diverted, resold, or used by the recipient for unlawful purpose; and
(10) The VBE or VBE participants must make all records available to the Secretary upon request to ensure compliance with the safe harbor.
The OIG is also considering additional requirements for this safe harbor related to: 1) advanced or concurrent bona fide determinations of commercial reasonableness and direct relationship to management of care; 2) cost-shifting; 3) fair-market value; and 4) dialysis providers.
Value-Based Arrangements with Substantial Downside Financial Risk
This safe harbor would protect both monetary and in-kind remuneration for care coordination arrangements where the VBE assumes a substantial financial risk from a payor for a targeted patient population.
Value-Based Arrangements with Full Financial Risk
This safe harbor would protect certain arrangements that involve in-kind and monetary remuneration involving VBEs that assume full financial risk for a target patient population.
Patient Engagement and Support Safe Harbor
The OIG proposes a new safe harbor for certain arrangements where VBE participants provide patient engagement tools and supports to specific patients to improve quality, health outcomes, and efficiency. Under the proposed safe harbor, “remuneration” under the AKS would not include in-kind engagement tools or supports directly connected to coordination and management that a VBE participant directly furnishes to a patient in a target patient population.
Key conditions and safeguards for the safe harbor include the following, among others:
- The protected patient engagement tools and supports would be limited to those that only the VBE participant furnishes directly to patients in the VBE’s defined target population, and at the recommendation of the patient’s recommended health care provider;
- Protected patient engagement tools and supports would be limited to in-kind, preventive items, goods, or services, or items, goods, or services such as health-related technology and health monitoring tools that are directly connected to the coordination and management of the target population’s care;
- The VBE participant cannot accept or use funds or free in-kind items or services furnished by any non-VBE participant to finance or facilitate its patient engagement tools or supports;
- The remuneration must not include any in-kind item, good, or service used for patient recruitment or marketing to patients;
- The tool or support must not result in medically unnecessary items or services reimbursed by federal health care programs; and
- The aggregate retail value of the tools and support cannot exceed $500 on an annual basis, with certain limited exceptions.
The OIG is soliciting additional comments regarding additional safeguards for the use of this safe harbor. The safeguards would address cost-shifting, consistent provision of patient incentives, monitoring effectiveness, retrieval of items and goods, and advertisement of the tools and supports.
The proposed rule includes a new safe harbor for certain remuneration provided in connection with a CMS-sponsored model, which would reduce the need for separate and distinct fraud and abuse waivers for new CMS-sponsored models. The OIG notes that this safe harbor provides CMS-sponsored model parties with an alternative pathway for protection from AKS and beneficiary inducement CMP related sanctions. This new AKS safe harbor would permit remuneration between and among parties to arrangements under a model or other initiative being tested or expanded by the Innovation Center and the Medicare Shared Savings Program, and in the form of incentives and supports provided by CMS model participants and their agents under the CMS-sponsored model. CMS must determine whether the safe harbor protection would be available for arrangements or patient incentives under a particular model. The OIG proposes the following conditions for protection under the safe harbor: (1) Participants must determine that the arrangement will advance one or more goals of the CMS-sponsored model; (2) The exchange of value under the arrangement must not induce parties or other providers to furnish medically unnecessary items or reduce medically necessary items or services to CMS-sponsored model patients; (3) Remuneration that is explicitly or implicitly offered, paid, solicited, or received in return for, or to induce or reward, any referrals or other business generated outside of the CMS-sponsored model is prohibited; (4) The arrangement must be in writing; (5) Materials and records about the arrangement must be made available to the Secretary upon request; and (6) The arrangements must comply with other programmatic requirements that CMS puts in place in connection with this safe harbor. The proposed rule also specifies conditions for CMS-Sponsored Model Patient Incentives and the duration of protection under the safe harbor.
Cybersecurity Technology and Services
The OIG proposes a new safe harbor for donations of certain cybersecurity technology and services with appropriate safeguards. The safe harbor would apply to covered technology, which is defined as “any software or other types of information technology, other than hardware.” The safe harbor conditions on donation and protected donors will include the following: (1) The donation must be necessary and used predominantly to implement and maintain effective cybersecurity; (2) Donors must not directly take into account the volume or value of referrals or other business between the parties when determining the recipient for the technology or services; (3) A potential recipient, or potential recipient’s practice, cannot demand, implicitly or explicitly, as a condition of doing business with the donor that it donates cybersecurity technology or services; (4) The donor and recipient must enter into a signed, written agreement; and (5) Donors may not shift the costs of any cybersecurity donations to federal health care programs.
The OIG alternatively proposes that a protected donation could include cybersecurity hardware that a donor has determined is reasonably necessary based on a risk assessment of its own organizations and the potential recipient.
Electronic Health Records Items and Services
The OIG proposes modifications to the existing safe harbor for electronic health records items and services. The proposed rule would add protections for certain related cybersecurity technology, update provisions regarding interoperability, and remove the sunset date. Proposed changes include the following, among others: (1) The OIG will change the language regarding the applicability of the safe harbor to EHR software from software that is “deemed to be interoperable if certified” to include software that “is” certified; (2) The safe harbor will be updated to better align it with recent legislative and regulatory changes regarding information blocking; (3) The coverage language will be modified to include cybersecurity software and services used to protect the EHR involved in the safe harbor; and (4) The proposed rule will remove the sunset provision included in the current safe harbor. The OIG is also considering additional changes related to the 15 percent recipient contribution requirement, replacement technology, and protected donors.
Outcomes-Based Payments and Part-Time Arrangements
The OIG proposes modifications to the existing safe harbor for personal services and management contracts to add flexibility with respect to outcome-based payments and part-time arrangements. The proposed changes include: (1) replacing the requirement that aggregate compensation under these agreements be set in advance with a requirement that the methodology for determining compensation is set in advance; (2) eliminating the requirement that the parties set a schedule, length, and exact charge of services of an agent that are provided periodically, sporadically, or on a part-time basis; and (3) protecting certain outcome-based payments. The proposed rule also contains some safe harbor conditions for protected outcome-based payment arrangements.
The proposed rule includes suggested modifications to the existing safe harbor for warranties. The proposal modifies the warranty safe harbor to: (1) protect warranties of one or more items or services under certain conditions; (2) exclude beneficiaries from the reporting requirement applicable to buyers; and (3) change the definition of “warranty” to include references to an “item or bundle of items, or services in combination with one or more related items,” and the quality of items rather than the material of items.
The existing safe harbor for local transportation would be amended to expand and modify mileage limits for rural areas and for transportation of patients discharged from inpatient facilities. Specifically, the OIG proposes to expand the distance which rural area residents can be transported and remove mileage limits for transportation of discharged patients directly to their homes or other chosen residence. The proposed rule also includes guidance on the safe harbor’s application to ride-sharing for patient transport purposes.
Additionally, the OIG is considering including transportation for health related, but non-medical purposes in the final safe harbor and seeks comments on the proposal.
Accountable Care Organization (ACO) Beneficiary Incentive Programs
The OIG proposes to codify the statutory exception to the definition of “remuneration” related to ACO Beneficiary Incentive Programs for the Medicare Shared Savings Program. The Budget Act of 2018 added a section to the Social Security Act that states that, “illegal remuneration [under the Anti-Kickback Statute] does not include . . .an incentive payment made to a Medicare fee-for-service beneficiary by an ACO under an ACO Beneficiary Incentive Program,” specifically when payments are made in accordance with statutory and regulatory requirements. OIG proposes to adopt and codify the statutory language with some small modifications.
The OIG proposes the following amendment to the beneficiary inducement CMP exception:
Telehealth for In-Home Dialysis
The proposed rule includes an amendment to the definition of “remuneration” in the CMP rules at 42 C.F.R. § 1003.110. The amendment interprets and incorporates a new statutory exception provided by the Budget Act of 2018. The OIG proposes to except telehealth technologies furnished to certain in-home dialysis patients from the definition of remuneration under the beneficiary inducement CMP. The OIG also lists proposed conditions and safeguards, some of which directly correspond to the statutory exception criterion.
The OIG will accept comments on the proposed rule until December 31, 2019.
The proposed rule is available at: