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1993.09.21 :  Safe Harbor Protection under Medicare and Medicaid Anti-Kickback Statute

Contact:  Judy Holtz (202) 619-0893
September 21, 1993

     HHS Secretary Donna E. Shalala today announced the
publication of proposed regulations describing eight new areas of
safe harbor protection under the Medicare and Medicaid anti-
kickback statute.  "In developing these proposed regulations,"
Secretary Shalala said, "we have tried to balance our mission of
protecting the Medicare and state health care programs against
fraud and abuse, while permitting legitimate business practices
and arrangements by program providers and practitioners.  To the
extent feasible, we have tried to develop 'bright line' rules
that clearly show whether specific business conduct fits within a
safe harbor."
     The anti-kickback statute prohibits the offering of anything
of value in exchange for the referral of Medicare and the state
health care programs' business.  Section 14 of the Medicare and
Medicaid Patient and Program Protection Act of 1987 requires the
publication of regulations to protect legitimate and beneficial
business arrangements from both criminal prosecution and civil
sanctions under the anti-kickback statute.  
     The proposed rules follow the publication of 13 final safe
harbors.  Eleven of them were issued in July 1991; the other two
in November 1992.
     The proposed rules request public comments on safe harbor
protection in the areas of:  investment interests in rural areas;
investment interests in ambulatory surgical centers; investment 
interests in group practices composed exclusively of active 
investors; practitioner recruitment in rural areas; obstetrical
malpractice insurance subsidies; referral arrangements to
specialty services; and cooperative hospital service
organizations.  
     "These proposed rules have been eagerly anticipated by the
health care industry, and by rural providers especially, since
several of the safe harbors are directly designed to encourage
health care access for rural and other underserved areas,"
Secretary Shalala said. 
     "Consistent with the intent of the statute, these proposed
regulations are not intended to unduly restrict individuals and
entities from freely engaging in business practices and
arrangements that encourage legitimate competition, innovation
and economy.  They are pro-competitive and offer additional
guidance to the health care community on the legality of certain
commercial arrangements."
     Congress intended that the regulations setting forth the
safe harbor provisions would be evolving rules that are
periodically examined and updated to reflect changing business
practices and technologies in the health care industry.  As with
the existing safe harbor provisions, the proposed safe harbors
would be voluntary and would impose no mandatory requirements on
any party.
     The proposed rules provide for a 60-day public comment
period in which interested parties may submit their comments and
recommendations for consideration.