[Federal Register: December 9, 2002 (Volume 67, Number 236)]
[Proposed Rules]
[Page 72892-72894]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09de02-17]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General
42 CFR Part 1001
Solicitation of Public Comments on Exceptions Under Section
1128A(a)(5) of the Social Security Act
AGENCY: Office of Inspector General (OIG), HHS.
ACTION: Notice of intent to develop regulations.
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SUMMARY: The OIG is soliciting public comments on the possible
development of exceptions under section 1128A(a)(5) of the Social
Security Act (the Act), the civil money penalty (CMP) prohibition on
offering inducements to Medicare and Medicaid beneficiaries to
influence their selection of a provider, practitioner, or supplier. In
particular, the OIG is interested in comments on possible exceptions
for complimentary local transportation, inducements related to clinical
trials, and inducements of nominal value. The OIG welcomes suggestions
for other exceptions under section 1128A(a)(5) of the Act, as well.
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-72-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-72-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
The Health Insurance Portability and Accountability Act of 1996
(HIPAA), Public Law 104-191, amended the Social Security Act (the Act)
to prohibit providers from offering patients any inducement to order or
receive Medicare or Medicaid reimbursable items or services from a
particular provider, practitioner, or supplier. Specifically, section
231(h) of HIPAA established a new provision, section 1128A(a)(5) of the
Act, to provide for the imposition of a CMP against any person who:
Offers or transfers remuneration to any individual eligible for
benefits under [Medicare or Medicaid] that such person knows or
should know is likely to influence such individual to order or
receive from a particular provider, practitioner, or supplier any
item or service for which payment may be made, in whole or in part,
under [Medicare or Medicaid].
Section 231(h) of HIPAA also created a new section 1128A(i)(6) of
the Act to define ``remuneration'' for purposes of section 1128A(a)(5)
of the Act. This section defines ``remuneration,'' in relevant part, as
``transfers of items or services for free or for other than fair market
value.'' Remuneration does not include certain enumerated practices,
including waivers of coinsurance and deductible amounts if the waiver
is not advertised; not routinely offered; and made following an
individualized good faith assessment of financial need or after the
failure of reasonable collection efforts. Other statutory exceptions
include properly disclosed copayment differentials in health plans;
incentives to promote the delivery of preventive health care services;
any practice permitted under a safe harbor to the federal anti-kickback
statute at 42 CFR 1001.952; and waivers of hospital outpatient
copayment amounts in excess of the minimum copayment amounts.
In 1998, Congress enacted section 6201 of the Omnibus Consolidated
and Emergency Supplemental Appropriations Act for Fiscal Year 1999,
which authorized the Secretary to issue regulations establishing ``safe
harbor'' exceptions under section 1128A(a)(5) of the Act for payment
practices that would otherwise run afoul of the statute. In addition,
the Secretary is vested with the authority to issue advisory opinions
providing legal and regulatory guidance to providers under this
section.
The OIG issued proposed regulations interpreting section
1128A(a)(5) of the Act on March 25, 1998 (63 FR 14393) and final
regulations on April 26, 2000 (65 FR 24400). To alert the industry to
the scope of acceptable practices, promote compliance, and level the
competitive playing field, we have issued further guidance on the
statute in a Special Advisory Bulletin on Offering Gifts and Other
Inducements to Beneficiaries (67 FR 55855; August 30, 2002). In the
Bulletin, we indicated our intent to solicit public comments on the
possible regulatory exceptions to the statute.
II. Solicitation of Comments and Suggestions for Additional Exceptions
The OIG invites comments and suggestions for new regulatory
exceptions to section 1128A(a)(5) of the Act. In particular, we are
seeking comments and suggestions on possible exceptions for
complimentary local transportation; remuneration to induce
participation in clinical trials; and inducements of low value. We also
welcome comments on other possible exceptions to section 1128A(a)(5).
Comments that include detailed descriptions of relevant industry
business practices, address the legal and policy concerns raised by the
application of section 1128A(a)(5) to particular business practices,
and offer specific suggestions for applicable criteria that might apply
under a regulatory exception are particularly useful.
A. Criteria for Establishing Exceptions
In giving the OIG authority to create additional regulatory
exceptions to--and issue advisory opinions on--section 1128A(a)(5) of
the Act, Congress provided no guidance on the criteria to be applied.
The absence of criteria is especially problematic because any exception
to the prohibition creates the very harm prohibited (i.e., the
inducement of beneficiaries), resulting in an uneven competitive
playing field. Moreover, any exception will result in a valuable
benefit to Medicare and
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Medicaid beneficiaries. In the absence of statutory guidance,
attempting to distinguish among types of benefits or categories of
beneficiaries necessarily results in arbitrary standards. In these
circumstances, the OIG has determined to exercise its regulatory
authority cautiously by limiting exceptions to areas in which Congress
has indicated a desire for flexibility in the provision remuneration to
beneficiaries or where the provision of such remuneration serves a
governmental interest.
B. Specific Areas of Interest
1. Complimentary Local Transportation
In enacting section 1128A(a)(5) of the Act, Congress intended that
the statute not preclude the provision of complimentary local
transportation of nominal value (H.R. Conf. Rep. No. 104-191 at 255
(1996)). We have interpreted nominal value to mean no more than $10 per
item or service or $50 in the aggregate. (See 65 FR 24411; April 6,
2000.) We are concerned that this interpretation may be overly
restrictive in the context of complimentary local transportation.
Accordingly, we seek public input on the following issues as they
relate to a possible exception for complimentary transportation:
[sbull] Forms of transportation. What forms of transportation
should be considered in developing an exception and how should various
forms of transportation be treated? We believe that luxury
transportation (e.g., limousines), as well as certain specialized
transportation (e.g., ambulances) should not be covered in an
exception. Are there other forms of transportation that should be
excluded (e.g., handicapped-accessible vans, taxis, public
transportation)?
[sbull] Area in which transportation is offered. Should the
complimentary transportation service be limited to a provider's primary
service area? If so, how should a service area be defined? Should there
be a different rule for rural or underserved areas or patients? Should
complimentary transportation be permitted to the nearest facility even
if the patient resides outside the primary service area?
[sbull] Eligibility for transportation. Should providers be
required to offer the transportation services to all patients? What
other kinds of eligibility requirements might be permitted? Certain
eligibility criteria, such as diagnosis or insurance coverage, would
clearly raise significant issues. What about other eligibility
criteria, such as a showing of transportation or financial need,
chronic conditions, special services, or safety or treatment
compliance?
[sbull] Type of provider offering the transportation. Should the
rules be different depending on the type of provider or supplier
offering the transportation services? Free transportation services
offered by individuals or small groups of providers, including
physicians, or by freestanding clinics have been subject to greater
scrutiny. Historically, for example, unscrupulous providers and clinics
have offered free transportation in conjunction with Medicare and
Medicaid frauds.
[sbull] Destination. Should a provider be permitted to furnish
transportation to other health care providers or only to its own
premises for appointments for its own services? Some hospitals
apparently provide free transportation to patients for private office
visits with local physicians or other professionals; others limit
transportation service to practitioners with hospital staff privileges.
In addition, many hospitals and physician practices are co-located on a
single campus. What safeguards might be included to protect against
abuse if transportation is offered to the premises of other providers
(e.g., free transportation of patients as a financial benefit to other
providers)? What about transportation among entities affiliated through
health systems? What about transportation for reasons other than
medical appointments?
[sbull] Marketing and advertising. What are the practical and
policy considerations associated with allowing marketing or advertising
of complimentary transportation services? What would constitute
reasonable limits on promotional activities?
[sbull] Other criteria. Are there other safeguards, limitations, or
conditions that should apply in any exception for complimentary
transportation?
2. Clinical Trials
Historically, sponsors of clinical trials have offered various
inducements to patients to enroll in their trials. Because Medicare did
not cover medical services incident to most clinical trials, these
inducements did not trigger scrutiny under the various federal program
fraud and abuse sanctions. However, in 2000, the Centers for Medicare
and Medicaid Services (CMS) issued a national coverage determination
(NCD) providing for coverage for physician, hospital, and other
services incidental to certain clinical trials (``Medicare Coverage
Routine Costs of Beneficiaries in Clinical Trials''; September 19,
2000). Under the NCD, all other requirements of the Medicare program
apply, including the various fraud and abuse authorities. In extending
coverage to certain clinical trials, CMS intended to remove impediments
to Medicare beneficiaries who want to enroll in trials, but not to
grant favored status to clinical trials. This distinction is important,
because many clinical trials involve unproven alternatives to existing
effective treatments.
Because we are concerned that section 1128A(a)(5) not unduly impede
valuable clinical trials, we are soliciting comments and suggestions on
how to apply section 1128A(a)(5) to inducements to participate in bona
fide clinical trials. Issues of particular interest to the OIG include:
[sbull] Threshold level of Medicare reimbursement. In many clinical
trials, the volume and value of covered Medicare services provided to
enrollees is likely to be significant, and trial sponsors may have a
financial incentive to offer inducements to Medicare beneficiaries to
enroll. For example, hospitalization triggers a substantial Medicare
payment. However, it is possible that some clinical trials may involve
only a small volume or value of Medicare covered services. Should a
possible exception turn on the volume or value of Medicare services
involved? If so, what would be the appropriate threshold level?
[sbull] Sponsorship of studies. One issue in crafting an exception
for inducements associated with clinical trials would be defining the
universe of trials that would be covered by the exception. We believe
covered trials should have a clear potential public benefit. The scope
of ``deemed'' trials under the NCD is overly broad for purposes of a
possible exception to section 1128A(a)(5) of the Act. We are interested
in comments regarding the scope of covered trials and the criteria that
might apply to distinguish those with potential public benefit from
those with solely or chiefly commercial value. We are also concerned
that, as noted in several OIG studies, some trial sponsors provide
investigators and other persons in positions to identify and influence
potential enrollees with substantial monetary payments. (See, for
example, the OIG report issued in June 2000, entitled ``Recruiting
Human Subjects: Pressures in Industry-Sponsored Clinical Research''
(OEI-01-97-00195)).
[sbull] Type or amount of inducements. We are interested in
information regarding the types of beneficiary inducements that might
be offered in connection with clinical trials (e.g., waivers of
copayments, provision of otherwise uncovered services, drugs, or
equipment). In the clinical trial context,
[[Page 72894]]
what are the practical and policy considerations associated with the
various forms of inducements? Which kinds of inducements matter most to
the efficient and successful completion of a clinical trial? What might
be a reasonable cap on the value of inducements offered to particular
patients?
[sbull] Sources of benefits. The OIG is aware that, in some cases,
free items or services are offered to enrollees in a clinical trial by
parties other than the trial sponsor. For example, a manufacturer might
furnish patients with free or discounted products used in the course of
the trial (but not the products that are the subject of the clinical
trials). These kinds of arrangements raise concerns, as the benefits
may induce enrollees to continue to use the manufacturer's products
after completion of the trial.
3. Inducements of Low Value
As noted above, Congress indicated an intent to permit items and
services of ``nominal'' value under section 1128A(a)(5) of the Act.
Consistent with this intent, in the preamble to the final regulations
governing section 1128A(a)(5), we indicated that items and services of
nominal value are not prohibited by the statute and thus no exception
would be necessary (65 FR 24410; April 6, 2000). We further interpreted
``nominal'' value to mean less the $10 per item and $50 in the
aggregate on an annual basis (65 FR 24411; April 6, 2000).
We invite comments on whether, for the sake of clarity and bright-
line guidance, we should codify an exception for inducements of low
value, and, if so, what the value should be. Should the exception
include a per item or service limitation on value or should it look
solely to value on an annual (or other) aggregate basis?
4. Other Exceptions
The OIG welcomes suggestions for other possible exceptions to
section 1128A(a)(5) of the Act. As noted above, comments are
particularly useful if they address the legal and policy concerns
raised by the application of section 1128A(a)(5) to particular business
practices and offer specific suggestions for applicable criteria.
Dated: November 19, 2002.
Janet Rehnquist,
Inspector General.
[FR Doc. 02-31040 Filed 12-6-02; 8:45 am]
BILLING CODE 4152-01-P