[Federal Register: December 9, 2002 (Volume 67, Number 236)]
[Proposed Rules]
[Page 72894-72896]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09de02-18]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General
42 CFR Part 1001
Solicitation of New Safe Harbors and Special Fraud Alerts
AGENCY: Office of Inspector General (OIG), HHS.
ACTION: Notice of intent to develop regulations.
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SUMMARY: In accordance with section 205 of the Health Insurance
Portability and Accountability Act (HIPAA) of 1996, this annual notice
solicits proposals and recommendations for developing new and modifying
existing safe harbor provisions under the anti-kickback statute
(section 1128B(b) of the Social Security Act), as well as developing
new OIG Special Fraud Alerts. In addition, this notice solicits public
comments regarding the development of possible guidance addressing
certain credentialing practices.
DATES: To assure consideration, public comments must be delivered to
the address provided below by no later than 5 p.m. on February 7, 2003.
ADDRESSES: Please mail or deliver your written comments to the
following address: Office of Inspector General, Department of Health
and Human Services, Attention: OIG-71-N, Room 5246, Cohen Building, 330
Independence Avenue, SW., Washington, DC 20201.
We do not accept comments by facsimile (FAX) transmission. In
commenting, please refer to file code OIG-71-N. Comments received
timely will be available for public inspection as they are received,
generally beginning approximately 3 weeks after publication of a
document, in Room 5541 of the Office of Inspector General at 330
Independence Avenue, SW., Washington, DC, on Monday through Friday of
each week from 8 a.m. to 4:30 p.m.
FOR FURTHER INFORMATION CONTACT: Joel Schaer, (202) 619-0089, OIG
Regulations Officer.
SUPPLEMENTARY INFORMATION:
I. Background
A. The OIG Safe Harbor Provisions
Section 1128B(b) of the Social Security Act (the Act) (42 U.S.C.
1320a-7b(b)) provides criminal penalties for individuals or entities
that knowingly and willfully offer, pay, solicit, or receive
remuneration in order to induce or reward business reimbursable under
the Federal health care programs. The offense is classified as a felony
and is punishable by fines of up to $25,000 and imprisonment for up to
5 years. The OIG may also propose the imposition of civil money
penalties, in accordance with section 1128A(a)(7) of the Act (42 U.S.C.
1320a-7a), or exclusions from the Federal health care programs, in
accordance with section 1128(b)(7) of the Act (42 U.S.C. 1320a-
7(b)(7)).
Since the statute on its face is so broad, concern has been
expressed for many years that some relatively innocuous commercial
arrangements may be subject to criminal prosecution or administrative
sanction. In response to the above concern, the Medicare and Medicaid
Patient and Program Protection Act of 1987, section 14 of Public Law
100-93, specifically required the development and promulgation of
regulations, the so-called ``safe harbor'' provisions, specifying
various payment and business practices which, although potentially
capable of inducing referrals of business reimbursable under the
Federal health care programs, would not be treated as criminal offenses
under the anti-kickback statute and would not serve as a basis for
administrative sanctions. The OIG safe harbor provisions have been
developed ``to limit the reach of the statute somewhat by permitting
certain non-abusive arrangements, while encouraging beneficial and
innocuous arrangements'' (56 FR 35952; July 29, 1991). Health care
providers and others may voluntarily seek to comply with these
provisions so that they have the assurance that their business
practices are not subject to any enforcement action under the anti-
kickback statute or related administrative authorities. The safe harbor
provisions are codified at 42 CFR 1001.952.
B. OIG Special Fraud Alerts and Special Advisory Bulletins
The OIG has also periodically issued Special Fraud Alerts and
Special Advisory Bulletins to give continuing guidance to health care
providers with respect to practices the OIG finds potentially
fraudulent or abusive. The Special Fraud Alerts and Bulletins encourage
industry compliance by giving providers guidance that can be applied to
their own businesses. The OIG Special Fraud Alerts and Bulletins are
intended for extensive distribution directly to the health care
provider community, as well as those charged with administering the
Federal health care programs. The OIG Special Fraud Alerts and
Bulletins are available on the
[[Page 72895]]
OIG Web page at http://oig.hhs.gov/fraud/fraudalerts.html.
C. Section 205 of Public Law 104-191
Section 205 of Public Law 104-191 requires the Department to
develop and publish an annual notice in the Federal Register formally
soliciting proposals for modifying existing safe harbors to the anti-
kickback statute and for developing new safe harbors and Special Fraud
Alerts.
In developing safe harbors for a criminal statute, the OIG is
required to engage in a thorough review of the range of factual
circumstances that may fall within the proposed safe harbor subject
area so as to uncover potential opportunities for fraud and abuse. Only
then can the OIG determine, in consultation with the Department of
Justice, whether it can effectively develop regulatory limitations and
controls that will permit beneficial and innocuous arrangements within
a subject area while, at the same time, protecting the Federal health
care programs and their beneficiaries from abusive practices.
II. Solicitation of Additional New Recommendations and Proposals
In accordance with the requirements of section 205 of Public Law
104-191, the OIG last published a Federal Register solicitation notice
for developing new safe harbors and Special Fraud Alerts on December
19, 2001 (66 FR 65460). As required under section 205, a status report
of the public comments received in response to that notice is set forth
in Appendix G to the OIG's Semiannual Report covering the period April
1, 2002 through September, 30, 2002.\1\ The OIG is not seeking
additional public comment on the proposals listed in Appendix G at this
time. Rather, this notice seeks additional recommendations regarding
the development of proposed or modified safe harbor regulations and new
Special Fraud Alerts beyond those summarized in Appendix G to the OIG
Semiannual Report referenced above. A detailed explanation of
justifications for a suggested safe harbor or Special Fraud Alert, as
well as supporting empirical data if available, would be helpful and
should, if possible, be included in any response to this solicitation.
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\1\ The OIG Semiannual Report can be accessed through the OIG
Web site at http://oig.hhs.gov/publications/semiannual.html.
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A. Criteria for Modifying and Establishing Safe Harbor Provisions
In accordance with section 205 of HIPAA, we will consider a number
of factors in reviewing proposals for new or modified safe harbor
provisions, such as the extent to which the proposals would effect an
increase or decrease in--
[sbull] Access to health care services;
[sbull] The quality of care services;
[sbull] Patient freedom of choice among health care providers;
[sbull] Competition among health care providers;
[sbull] The cost to Federal health care programs;
[sbull] The potential overutilization of the health care services;
and
[sbull] The ability of health care facilities to provide services
in medically underserved areas or to medically underserved populations.
In addition, we will take into consideration other factors,
including, for example, the existence (or nonexistence) of any
potential financial benefit to health care professionals or providers
that may vary based on their decisions to (1) order a health care item
or service or (2) arrange for a referral for health care items or
services to a particular practitioner or provider.
B. Criteria for Developing Special Fraud Alerts and Advisory Bulletins
In determining whether to issue Special Fraud Alerts and Special
Advisory Bulletins, we will consider, among other factors, whether, and
to what extent, the identified conduct may result in any of the
consequences set forth above, as well as the potential volume and
frequency of the identified conduct.
III. Solicitation of Public Comments on Certain Credentialing Practices
We have been asked by the American Medical Association (AMA) to
issue guidance regarding the legality under the federal anti-kickback
statute of certain practices in connection with the granting of
hospital staff privileges. According to the AMA and other sources, an
increasing number of hospitals are refusing to grant staff privileges
to physicians who (1) own or have other financial interests in, or
leadership positions with, competing healthcare entities, (2) refer to
competing health care entities, or (3) fail to admit some specified
percentage of their patients to the hospital. There may be other
examples of restrictive credentialing.
In evaluating the propriety of these credentialing practices, the
OIG has identified the following issues about which it is soliciting
public comment in order to develop a better understanding of these
practices and their potential for abuse:
A. Are hospital staff privileges ``remuneration''? Historically, so
long as a physician had privileges at one hospital, the denial of
privileges at another hospital was rarely actionable, since the
physician could admit his or her patients to the hospital at which the
physician had privileges. With the growth of managed care networks,
especially in combination with the growth of health care systems that
substantially control local markets, access to patients may depend on
having privileges at the proper hospital. What effect, if any, do these
developments have on the determination whether staff privileges are
remuneration? Should the determination whether staff privileges have
monetary value turn on the particular factual circumstances (e.g., in a
given market, does access to privileges have a demonstrable monetary
value)? Under what circumstances do staff privileges have monetary
value?
B. What are the implications of a hospital's denial of privileges
to a physician who competes with the hospital? Increasingly, physicians
invest in and own entities, such as ambulatory surgical centers,
cardiac catheterization labs, and specialty hospitals, that compete
with hospital services. These physicians may be in a position to steer
profitable business or patients to their own competing business through
their control of referrals. A credentialing policy that categorically
refuses privileges to physicians with significant conflicts of interest
would not appear to implicate that anti-kickback statute in most
situations. How should such physicians be defined: ownership? employee
or contractor? staff leadership position?
C. Should the exercise of discretion by the privilege-granting
hospital affect the analysis under the anti-kickback statute? Several
credentialing practices have been brought to our attention that give
the privilege-granting hospital discretion to evaluate the ``financial
conflict'' created by a physician's outside business interests and
permit the physician to retain privileges subject to periodic review.
Such discretionary decision-making appears to raise substantial risks
under the anti-kickback statute (i.e., privileges are conditioned on a
sufficient flow of referred business). What factors other than the
amount of business still being generated for the hospital might be used
as the basis for the hospital exercising discretion in these kinds of
arrangements? From a policy perspective, are there bases for the
hospital's review or exercise of discretion that should not implicate
the
[[Page 72896]]
anti-kickback statute? Are there limits on discretion that might
provide sufficient safeguards under the anti-kickback statute?
D. Can privileges ever be conditioned on referrals, other than
minimums necessary for clinical proficiency? Some hospitals have
apparently attempted to condition privileges on a physician's referral
of a predetermined level of his or her hospital business to the
hospital. Assuming the privileges have monetary value, such conditions
would appear to be suspect under the anti-kickback statute. Are there
conditions under which such conditions might be justified? Failing
financial health? Guaranteeing a patient volume sufficient to support
offering a critical service not otherwise available (e.g., a cardiac
service in a rural area)? Does the level of required referrals or
business matter (e.g., is there a difference between a requirement of
25 percent of referrals compared to 75 percent)?
E. What is the effect of credentialing restrictions that apply only
to members of a group practice? What are the implications of a hospital
restricting privileges for some, but not all, members of a group
practice? What about restricting privileges of the entire group?
Finally, we are interested in comments on other aspects of
restrictive credentialing practices that should inform our review of
these practices and development of possible guidance under the anti-
kickback statute.
Dated: November 19, 2002.
Janet Rehnquist,
Inspector General.
[FR Doc. 02-31039 Filed 12-6-02; 8:45 am]
BILLING CODE 4152-01-P