On December 29, 2014, the U.S. Department of Health and Human Services Office of Inspector General (OIG) released its annual solicitation (the “Solicitation”) for proposals and recommendations for developing new and modifying existing safe harbor provisions under the Federal Health Care Program Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)) (the “AKS”), as well as for developing new OIG Special Fraud Alerts.  The Solicitation is expected to appear in the December 30 Federal Register, and comments are expected to be due by March 2, 2015 (60 days after Federal Register publication).

The AKS generally prohibits offering, solicitation, payment or acceptance of remuneration for certain referrals within the health care industry.  The AKS is an intent-based criminal statute, but it does not require “actual knowledge” of the statute or “specific intent” to violate it.  In addition, some authorities have construed the AKS to be violated if “one purpose” of a financial arrangement is to induce the referral of federal health care program (such as Medicare or Medicaid) business. In addition, a claim that includes items or services resulting from a violation of the AKS constitutes a “false claim” for purposes of the federal civil false claims act.

Because the AKS can potentially prohibit otherwise beneficial or non-abusive arrangements, the OIG has been authorized to promulgate regulatory “safe harbors” that, if strictly complied with, will protect an arrangement from culpability under the AKS.  The current Solicitation is pursuant to an annual requirement imposed upon the OIG under Section 205 of the Health Insurance Portability and Accountability Act of 1996.  The OIG has previously promulgated safe harbors (at 42. C.F.R. § 1001.952) to protect a number of arrangements, including the following, if structured properly: investment interests; space rentals; equipment rentals; personal services and management contracts; sales of practice; referral services; warranties; discounts; employee payments; group purchasing organization administrative fees; waivers of beneficiary coinsurance and deductible amounts; managed care risk-sharing arrangements; practitioner recruitment; obstetrical malpractice insurance subsidies; cooperative hospital service organizations; referral agreements for specialty services; ambulance restocking; electronic prescribing items and services; and electronic health records items and services.  In addition, the OIG proposed several new safe harbors, not yet finalized, in a proposed rule published October 3, 2014. For questions regarding whether any particular arrangement potentially violates the AKS and/or fits into a current safe harbor, readers should seek appropriate legal counsel.

Separately, the OIG periodically issues “Special Fraud Alerts” intended to give guidance with respect to practices OIG finds potentially fraudulent or abusive.  Although a “Special Fraud Alert”, by its nature, increases the compliance risk of activities described in it, it can also be helpful in delineating specific areas of concern and offering clarity where needed.  For example, the OIG’s 1994 Special Fraud Alert on Prescription Drug Marketing Practices remains an important source of guidance to the pharmaceutical industry.

Details regarding the OIG’s criteria for modifying or adopting new safe harbor or Special Fraud Alerts are included in the Solicitation. While the OIG will consider all comments, it is not required to adopt any proposed new or modified safe harbor or Special Fraud Alert.

Posted by Kathleen Peterson

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