On December 7, 2016, the HHS OIG issued a long-awaited final rule providing additional safe harbors under the federal anti-kickback statute (AKS) and changed the definition of “remuneration” in the civil monetary penalty (CMP) regulations.  The amendment is intended to protect certain payment practices and business arrangements from sanctions under the AKS.  A second final rule amends CMP regulations “to incorporate new CMP authorities, clarify existing authorities, and reorganize regulations on CMPs, assessments, and exclusions to improve readability and clarity.”

The final rules are the culmination of a proposed rule from 2014.  OIG stated that changes to the safe harbor provisions are based on the Congress’s intention “that the safe harbor regulations be updated periodically to reflect changing business practices and technologies in the health care industry.”  OIG stated in the final rule that it incorporated “safe harbors for payment and business practices permitted under the [Medical Prescription Drug, Improvement, and Modernization Act of 2003] and [Affordable Care Act (ACA)], as well as new safe harbors . . . to protect practices [OIG views] as posing a low risk to Federal health care programs.” 

The new safe harbors are found in the amended 42 C.F.R. § 1001.952, and include the following:

• Protection for certain cost-sharing waivers, including (i) pharmacy waivers of cost-sharing for financially needy beneficiaries and (ii) waivers of cost-sharing for emergency ambulance services furnished by State- or municipality-owned ambulance services;
• Protection for certain remuneration between Medicare Advantage organizations and federally qualified health centers;
• Protection for discounts by manufacturers on drugs furnished to beneficiaries under the Medicare Coverage Gap Discount Program; and
• Protection for free or discounted local transportation services that meet specified criteria.

OIG also changed the definition of “remuneration” in the CMP regulations at 42 C.F.R. Part 1003.  These changes add “copayment” to the existing “coinsurance and deductible amounts,” and also incorporate statutory exceptions for:

• 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; and
• Copayment waivers for the first fill of generic drugs.

The second rule implements provisions of the ACA that allow for civil monetary penalties, assessments, and exclusions for:

• Failure to grant OIG timely access to records;
• Ordering or prescribing while excluded;
• Making false statements, omissions, or misrepresentations in an enrollment application;
• Failure to report and return overpayments; and
• Making or using a false record or statement that is material to a false or fraudulent claim.

The civil monetary penalties for failure to report and return overpayments was a notable change from the 2014 proposed rule.  In the earlier version, OIG sought to impose a default penalty of up to $10,000 per day.  The final rule adopts a per-item/service model, which is more consistent with the text of the ACA and reduces the threat of large penalties that may bear no relationship to the underlying overpayment.