With its recently published final rule amending safe harbors to the anti-kickback statute, the U.S. Department of Health & Human Services’ Office of Inspector General (OIG) adds new protections from sanctions for certain payment practices and business arrangements.

OIG’s amendments, published Dec. 7, 2016, stem from the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) and the Affordable Care Act (ACA), which permit certain additional payment and business practices. It is noteworthy that the final rule emphasizes the imminent transition from volume to value-based and patient-centered care, as well as ever-changing business relationships among health care providers.

The federal anti-kickback statute provides criminal penalties for individuals or entities that “knowingly and willfully offer, pay, solicit or receive remuneration in order to induce or reward the referral of business reimbursable under federal health care programs.” This offense is classified as a felony punishable by fines of up to $25,000 and imprisonment up to five years. Violations may also warrant civil monetary penalties and liability under the federal False Claims Act. Because of the anti-kickback statute’s potential broad reach, the OIG created certain safe harbors under which payment and business practices would not be subjected to liability.

With respect to the existing safe harbors, the OIG included the following changes in its Final Rule, effective Jan. 6, 2017:

  1. Correcting the safe harbor for referral services. The Final Rule changes the language to its original 1999 final rule, clarifying that the safe harbor precludes protection for payments from participants to referral services that are based on the volume or value of referrals to, or business otherwise generated by, either party for the other party.
  2. Adding cost-sharing waivers the OIG says “pose a low risk of harm.” The waivers now apply to all federal health care programs as well as expanding already existing waivers and reductions of Part D cost-sharing obligations by pharmacies to the Medicaid program.
  3. Incorporating into its safe harbor the statutory exception of the MMA, which protects “any remuneration between a federally qualified health center (or an entity controlled by such a health center) and a Medicare Advantage Organization pursuant to a written agreement.”
  4. Incorporating into existing safe harbors the ACA’s provision to protect the discounts provided for under the Medicare Coverage Gap Discount Program.
  5. Adding a safe harbor protecting free or discounted local transportation made available by an “eligible entity” to patients to obtain medically necessary items or services.

This is intended to be only a general summary of the OIG’s Final Rule, which aimed to address many long-standing questions and concerns from those in the health care industry. There are many nuances within each safe harbor that must be clearly analyzed in order to determine whether an arrangement would be afforded the respective protections.