Office
of Inspector General
Office of Public Affairs
330 Independence Ave., SW
Room 5541, Cohen Bldg.
Washington, DC 20201
(202) 619-1343
FOR IMMEDIATE RELEASE
Thursday, Nov. 18, 1999
Contact: Alwyn Cassil (202) 205-0333
Inspector General Announces Eight New Anti-kickback Statute Safe Harbors
The Department of Health and Human Services' Office of Inspector General today
announced eight new final regulatory "safe harbors" to the federal
anti-kickback statute, which prohibits the knowing payment of anything of value
to influence referral of federal health care program business, including Medicare
and Medicaid.
The new safe harbors, which protect certain arrangements from prosecution under
the anti-kickback statute, address the following payment or business practices:
investments in underserved areas; practitioner recruitment in underserved areas;
obstetrical malpractice insurance subsidies for underserved areas; sales of
physician practices to hospitals in underserved areas; investments in ambulatory
surgical centers; investments in group practices; referral arrangements for
specialty services; and cooperative hospital service organizations.
"These new safe harbors reflect our desire to accommodate the legitimate
concerns of the industry and to promote the effective and efficient delivery
of health care services to federal health care program beneficiaries,"
Inspector General June Gibbs Brown said. "The final regulation responds
to many of the concerns raised by the industry in response to our original proposals,
as well as our annual solicitation for new safe harbor suggestions."
On the books since 1972, the federal anti-kickback law prohibits anyone from
knowingly and willfully receiving or paying anything of value to influence the
referral of federal health care program business. Violations of the law are
punishable by up to five years in prison, criminal fines up to $25,000, administrative
civil money penalties up to $50,000, and exclusion from participation in federal
health care programs.
"The federal anti-kickback statute is the guarantor of objective medical
advice for federal health care program beneficiaries and helps ensure that providers
refer patients based on the patients' best medical interests and not because
the providers stand to profit from the referral," Brown said.
Because the law is broad on its face, concerns arose among health care providers
that some relatively innocuous -- and in some cases even beneficial -- commercial
arrangements are prohibited by the anti-kickback law. Responding to these concerns,
Congress in 1987 authorized the Department to issue regulations designating
specific safe harbors for various payment and business practices that, while
potentially prohibited by the law, would not be prosecuted.
The Office of Inspector General has previously published 13 regulatory safe
harbors, 11 in 1991 and two in 1992. A new final rule scheduled for publication
in the Nov. 19, 1999, Federal Register will establish eight new safe
harbor provisions and clarify six of the original 11 safe harbors published
in 1991. Additionally, an interim final rule establishing two additional safe
harbors for shared-risk arrangements is scheduled for publication in the Nov.
19, 1999, Federal Register. Both rules went on public display today
at the Federal Register. After the new rules are published in the Federal
Register, there will be a total of 23 regulatory safe harbors consolidated
in the Code of Federal Regulations in 21 subparagraphs.
The 1991 safe harbors addressed the following types of business or payment practices:
investments in large publicly held health care companies; investments in small
health care joint ventures; space rental; equipment rental; personal services
and management contracts; sales of retiring physicians' practices to other physicians;
referral services; warranties; discounts; employee compensation; group purchasing
organizations; and waivers of Medicare Part A inpatient cost-sharing amounts.
The 1992 interim final safe harbors, which were issued in final form in 1996,
addressed the following practices in managed care settings: increased coverage,
reduced cost-sharing amounts, or reduced premium amounts offered by health plans
to beneficiaries; and price reductions offered to health plans by providers.
The new final rule clarifies aspects of the original safe harbors for large
and small entity investments; space rental; equipment rental; personal services
and management contracts; referral services; and discounts. The intent of the
clarifications is to make the regulations easier for the industry to understand
and apply to particular factual circumstances.
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Note: A fact sheet highlighting aspects of the new regulatory safe harbors is available on the Office of Inspector General Web site at oig.hhs.gov. After the new rules are published in the Federal Register, scheduled for Nov. 19, 1999, the rules will be available on the Office of Inspector General Web site.