Reed Smith Client Alerts

On December 7, 2016, the Office of Inspector General of the Department of Health and Human Services published a final rule amending the safe harbors to the Anti-Kickback Statute (AKS) and the Civil Monetary Penalty (CMP) rules prohibiting beneficiary inducements. These changes protect certain practices and arrangements from criminal prosecution or civil sanctions under the AKS and/or the CMP law. The final rule finalizes, with certain modifications, all of the AKS safe harbors and beneficiary inducement CMP exceptions proposed in a proposed rule published on October 3, 2014.

On December 7, 2016, the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) published a final rule amending the safe harbors to the Anti-Kickback Statute (AKS) and the Civil Monetary Penalty (CMP) rules prohibiting beneficiary inducements. These changes protect certain practices and arrangements from criminal prosecution or civil sanctions under the AKS and/or the CMP (Final Rule).

The AKS prohibits individuals or entities from knowingly and willfully offering, paying, soliciting, or receiving remuneration to induce or reward business reimbursable under federal health care programs. As required by Congress, the OIG has issued safe harbor regulations that identify business practices that are not subject to sanction under the AKS. The Final Rule makes the following changes to the AKS safe harbor regulations:

  • Adds protection for free or discounted local transportation for medically necessary services and shuttle services meeting specified criteria
  • Adds protection for certain remuneration between Medicare Advantage organizations and federally qualified health centers
  • Adds protection for discounts by manufacturers on drugs furnished to beneficiaries under the Medicare Coverage Gap Discount Program
  • Makes a technical correction to the existing safe harbor for referral services
  • Adds protection for certain cost-sharing waivers, including pharmacy waivers of cost-sharing for financially needy Medicare Part D beneficiaries, and waivers of cost-sharing for emergency ambulance services furnished by state- or municipality-owned ambulance services

The beneficiary inducement CMP prohibits offering or transferring remuneration to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider of Medicare or Medicaid payable items or services. In the Final Rule, the OIG amends the definition of “remuneration” in the CMP regulations at 42 C.F.R. Part 1003 to add exceptions that accord with statutory enactments covering the following:

  • Copayment reductions for certain hospital outpatient department services
  • Certain remuneration that poses a low risk of harm and promotes access to care
  • Coupons, rebates, or other retailer reward programs that meet specified requirements
  • Certain remuneration to financially needy individuals
  • Copayment waivers for the first fill of generic drugs

Click here to access a PDF copy of the entirety of this Client Briefing.

Client Alert 2017-033