Optional_2023 Board Resources

(i)

Discounts for certain drugs provided to beneficiaries under the Medicare coverage gap discount program as specified by 42 U.S.C.S. § 1395w- 114a.

1.3 Safe Harbors . The AKS expressly authorizes the Secretary of HHS to create additional exceptions through regulation (i.e. “safe harbors”). On December 7, 2016 the Office of Inspector General (OIG) provided its latest updates to the safe harbors, which were made effective on January 6, 2017 and codified under 42 C.F.R. § 1001.952. Many of the safe harbors are narrowly drawn and contain detailed requirements. Compliance with a statutory exception or regulatory safe harbor is not mandatory. Arrangements that do not meet a statutory exception or safe harbor are subject to a facts and circumstances analysis to assess risk of running afoul of the AKS. OIG has stated that failure to comply fully with a safe harbor as meaning one of three things: 1) the arrangement does not fall within the ambit of the statute, and is not intended to induce the referral of business reimbursable under Medicare or Medicaid; 2) the arrangement could be a clear statutory violation; or 3) the arrangement may violate the statute in a less serious manner but not comply with a safe harbor – here, the degree of risk depends on a facts and circumstances inquiry, including whether the parties made a genuine good-faith effort to comply or the arrangement is innocuous. 4 In these circumstances, OIG would review the arrangement on a case-by-case basis to determine whether, based upon the totality of facts and circumstances, it poses a risk of fraud and abuse under the statute. 5 OIG has long articulated four general prevention goals of the AKS that help inform the facts and circumstances analysis: overutilization, increased costs to the federal health care programs, corruption of medical decision-making, and unfair competition. 6 Below is the list of safe harbors under 42 C.F.R. § 1001.952: (a) Investment interests; (b) Space rentals; (c) Equipment rentals; (d) Personal services and management contracts; (e) Sale of practice; (f) Referral services; (g) Warranties; (h) Discounts; (i) Payments to bona fide employees; (j) Payments by vendor to a group purchasing organization; (k) Certain waivers of copayments, coinsurance, and deductible amounts; (l) Increased coverage, reduced cost-sharing amounts, or reduced premium amounts offered by specified health plans; (m) Price reductions offered to health plans; (n) Physician recruitment payments; (o) Obstetrical malpractice insurance subsidies; (p) Investments in group practices; 4 See 56 FR 35952, 35954 (July 29, 1991). 5 See id. 6 See e.g. Special Fraud Alert: Laboratory Payments to Referring Physicians, 79 FR 40115, 40116 (July 11, 2014); Advisory Opinion 98-19.