OIG Proposed Rule Would Amend Anti-Kickback Statute Safe Harbors and Civil Monetary Penalty Rules 

On October 3, 2014, the U.S. Department of Health and Human Services, Office of Inspector General (“OIG”) published a proposed rule that would amend the safe harbors to the anti-kickback statute (“AKS”) and the civil monetary penalty (“CMP”) rules under the authority of the OIG. 

The proposed rule would add the following AKS safe harbors (note: the first three codify already existing statutory exceptions):

  • Part D Cost-Sharing Waivers by Pharmacies. This exception would protect the waiver or reduction of a Medicare beneficiary’s Part D cost-sharing amounts by a pharmacy if the following conditions are met: (1) the waiver or reduction is not advertised as part of a solicitation; (2) the pharmacy does not routinely waive the cost-sharing; and (3) before waiving the cost-sharing, the pharmacy either determines in good faith that the beneficiary has a financial need or the pharmacy fails to collect the cost-sharing amount after making a reasonable effort to do so.   
  • FQHCs and Medicare Advantage Organizations. Under this safe harbor, “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 described in section 1853(a)(4) of the [Social Security Act]” would be permitted.   
  • Medicare Coverage Gap Discount Program. This exception would protect a discount in the price an “applicable drug” of a manufacturer when the discount is furnished to a Medicare Part D beneficiary under the Medicare Coverage Gap Discount Program, provided the manufacturer participates in, and is in full compliance with all the requirements of, the Program.   
  • Cost-Sharing Waivers for Emergency Ambulance Services. This exception would protect the reduction or waiver of coinsurance or deductible amounts owed for ambulance services owed to an ambulance provider or supplier, provided the ambulance provider or supplier (1) is owned and operated by “a State or political subdivision of a State, or a federally recognized Indian tribe”; (2) is the Medicare Part B provider or supplier of emergency ambulance services; and (3) offers the reduction on a uniform basis, without regard to patient-specific factors.   
  • Local Transportation. This safe harbor would protect free or discounted local transportation services provided by an “Eligible Entity” to established patients (and, if needed, a person to assist the patient) to obtain medically necessary items and services. In addition, OIG would require that: (1) the transportation services are offered and provided in a manner unrelated to the past or anticipated volume or value of Federal health care program business; (2) the transportation services do not include “air, luxury (e.g., limousine), and ambulance-level transportation”; (3) the transportation services are not publicly advertised or marketed to patients or others who are potential referral sources, drivers or other involved in arranging the transportation are not paid on a per-beneficiary transported basis, and no marketing of health care items or services occurs during the course of the transportation; and (4) only local (i.e., no more than 25 miles) transportation is provided. The proposed rule defines an “Eligible Entity” as “any individual or entity, except for individuals or entities (or family members or others acting on their behalf) that primarily supply health care items.” This means a durable medical equipment (“DME”) supplier or pharmaceutical company would not be considered an “Eligible Entity” under this proposed safe harbor.

The proposed rule would codify four statutory exceptions to the definition of “remuneration” for purposes of the Beneficiary Inducement CMP, including: (1) remuneration that promotes access to care and poses a low risk of harm; (2) retailer rewards programs such as coupons and rebates; (3) items or services offered for free or at less than fair market value after, among other things, a determination that the recipient is in financial need; and (4) waivers of cost-sharing for the first fill of a generic drug. 

The proposed rule also would amend the Gainsharing CMP to “interpret certain provisions in a manner that reflects today’s health care landscape,” including “a narrower interpretation of the term ‘reduce or limit services’ than [it has] previously held.” OIG has previously recognized that gainsharing can be beneficial through the advisory opinion process, but the codification of these types of provisions would be significant for Accountable Care Organizations (“ACOs”) and other health care delivery systems that emphasize accountability for providing high quality care at lower costs. Although the agency does not propose specific regulatory text, it does solicit comments on several questions, including:

  • Should a hospital’s decision to standardize certain items (e.g., surgical instruments, medical devices, or drugs) be deemed to constitute reducing or limiting care?   
  • Should a hospital’s decision to rely on protocols based on objective quality metrics for certain procedures ever be deemed to constitute reducing or limiting care (e.g., protocols calling for the discontinuance of a prophylactic antibiotic after a specific period of time)?    
  • Should a hospital desiring to standardize items or processes as part of a gainsharing program be required to establish certain thresholds based on historical experience or clinical protocols, beyond which participating physicians could not share in cost savings (i.e., change beyond the relevant threshold would be deemed to constitute reducing or limiting services)?

Comments on the proposed rule are due by December 2, 2014. 

CMS Launches Open Payments Database 

After much anticipation, the Centers for Medicare & Medicaid Services (“CMS”) launched the Affordable Care Act’s Open Payments database on September 30, 2014. The database, which is available here, is supposed to help patients become more informed health care consumers by giving them an opportunity to find out if their doctors have a financial relationship with drug or medical device companies. 

According to the CMS press release, the database reflects nearly 4.4 million payments totaling nearly $3.5 billion that were made in the last five months of 2013 to 546,000 individual physicians and almost 1,360 teaching hospitals. The payments include consulting fees, research grants, travel reimbursements, and other gifts. More than 26,000 physicians and 400 teaching hospitals registered prior to the launch in order to review payments attributed to them. 

The functionality of the database has been criticized since the launch, but CMS expects to roll out improved search tools and other website enhancements over time.