oig changes to anti-kickback safe harbor...

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Presenting a live 90-minute webinar with interactive Q&A

OIG Changes to Anti-Kickback Safe Harbor

Provisions and the CMP Beneficiary

Inducement Prohibition

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

WEDNESDAY, NOVEMBER 1, 2017

Clinton Mikel, Partner, The Health Law Partners, Southfield, Mich.

Charles B. Oppenheim, Partner, Hooper Lundy & Bookman, Los Angeles

Jill S. Wright, Special Counsel, Foley & Lardner, Washington, D.C.

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Anti-Kickback Statute (AKS) - Overview

Knowingly and willfully

Solicit, receive, offer or pay

Remuneration

For referring or recommending or arranging for the purchase of items or services

Covered by a federal healthcare program (e.g., Medicare, Medicaid, TRICARE)

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AKS: Penalties

Felony ($25,000 fine and 5 years in prison)

Exclusion from Medicare and Medicaid

Civil money penalties

False Claims Act?

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“One Purpose” Rule

The AKS Statute is violated if “one purpose” of a payment is to induce referrals, even if there are also legitimate reasons for the payment

This interpretation comes from federal case law

This potentially gives the AKS very broad scope

Interpretation is part law and part lore 8

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Safe Harbors Safe harbors potentially immunize from scrutiny and

prosecution under the AKS certain innocuous arrangements

There are over two dozen safe harbors

Each arrangement must meet each requirement of an applicable safe harbor to enjoy immunity – no immunity for “substantial compliance”

The safe harbors are not mandatory; it does not mean an arrangement is unlawful if it doesn’t meet any safe harbor

Outside of safe harbor, judged by facts and circumstances 9

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New Safe Harbors (Jan. 6, 2017)

Referral Services (Technical Correction)

Protection for Certain Cost–Sharing Waivers

• Pharmacy waivers for financially needy

• Waivers of cost-sharing for emergency ambulance services for state/local ambulance providers

Protection for certain arrangements between FQHCs and Medicare Advantage plans

Protections under Medicare Coverage Gap Discount Program for pharmaceutical manufacturers’ discounts

Protection for certain free/discounted local transports

Civil Monetary Penalty (CMP) exceptions 10

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Referral Services

The OIG issued a safe harbor for referral services in 1999

There was a glitch in the wording

Payments by providers to the referral service are not supposed to take into account business generated by either party for the other party

Instead, the wording of the safe harbor prohibited payments taking into account business by “either party for the referral service”

18 years later, it’s been fixed! 11

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Cost Sharing Waivers (Pharmacy) Beneficiary cost sharing (i.e., copayments,

deductibles and co-insurance) amounts owed to a pharmacy under federal healthcare programs, may be waived or reduced if:

• Pharmacy does not “routinely” waive cost sharing amount (except for certain subsidy eligible individuals)

• The waiver or reduction is not part of an advertisement or solicitation

• The pharmacy makes a “good faith determination” the beneficiary is in financial need or makes “reasonable collection efforts” (except for certain subsidy eligible individuals)

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Cost Sharing Waivers (Emergency Ambulance)

Beneficiary cost sharing amounts owed for emergency ambulance transportation, for which the federal government pays fee for service, may be waived or reduced if:

• The ambulance provider or supplier is owned and operated by a state, a political subdivision of a state, or an Indian tribal health system

• The ambulance provider or supplier engaged in emergency response

• The waiver or reduction is offered on a uniform basis to all residents, tribal member or individuals transported, as applicable

• The ambulance provider or supplier cannot claim that amount as a bad debt or shift its cost to any federal healthcare program, other payors, or individuals

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FQHC – Medicare Advantage

Protects remuneration between any Federally Qualified Health Center (FQHC) and Medicare Advantage (MA) Organization, if:

• If FQHC and MA have written agreement under SSA 1853(a)(4)

• These agreements provide for the FQHC to provide services to the MA’s enrollees (i.e., a managed care provider agreement)

• The FQHC is paid by MA pursuant to the contract, and pursuant to special FQHC payment rules

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Medicare Coverage Gap/Pharmaceutical Manufacturer Discounts

Discounts on drugs to beneficiaries are protected under the Medicare Coverage Gap program, so long as:

• The discounted drug is an “applicable drug” under SSA 1860D-14A(g)

• The beneficiary is an “applicable beneficiary” under SSS 1860D-14A(g)

• The manufacturer of the drug participates in and complies with the Medicare Coverage Gap Discount Program

• This program basically covers certain Medicare beneficiaries who are in the “donut hole” for Part D benefits

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Questions?

16 Any views or opinions expressed in this presentation are solely those of the author(s) and do not necessarily represent those of Hooper, Lundy & Bookman. You should not assume or construe that this presentation represents the opinion of Hooper, Lundy & Bookman. Although this presentation provides information concerning potential legal issues, it is not a substitute for specific legal advice from qualified counsel. You should not and are not authorized to rely on this presentation as a source of legal advice. This presentation is solely for general educational and informational purposes. Your attendance at this presentation does not create any attorney-client relationship between you and Hooper, Lundy & Bookman. You should not act upon this information without seeking your own independent professional advice.

Charles B. Oppenheim Partner Hooper, Lundy & Bookman, P.C. Phone: 310-551-8110 E-mail: [email protected]

mailto:[email protected]



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http://www.thehlp.com/

OIG Changes to AKS Safe Harbor Provisions, Section 3:

Beneficiary Inducement Exceptions

Jill Wright

Strafford Webinar

November 1, 2017

Prohibited beneficiary inducements Sec. 1128A(a)(5) of the Social Security Act provides that:

– any person who offers or transfers

– remuneration

– to a Medicare or Medicaid beneficiary

– that the person knows or should know (actual knowledge, deliberate ignorance, or reckless disregard)

– is likely to influence the beneficiary’s selection of

– a particular provider, practitioner, or supplier of Medicare or Medicaid payable items or services

– may be liable for CMPs of up to $10,000 per wrongful act.

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Remuneration & Exceptions

Remuneration: Anything of value

Not an inducement:

–De Minimis Transfers of Value: less than $15/item or service and no more than $75/year per patient

–Practices permitted under Anti-Kickback Statute (AKS), including safe harbors

–Beneficiary inducement exceptions

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Knows/ Should know Includes deliberate ignorance or reckless disregard – no

proof of specific intent is required. (42 C.F.R. 1003.101.)

Some factors that indicate remuneration is an inducement (that know/should know standard met) include—

– conditioning the gift on the recipient’s using other goods and services from the provider

– steering the recipient toward a particular provider following receipt of the gift

– offering a service without charge

– obtaining a recommendation from the patient’s own health care professional

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Penalties/ Remedies

CMPL—

– CMP up to $15,270 (inflation adjustment) per item or service for a bene who was offered/received remuneration in violation of prohibition;

– Assessment of not more than 3 times the amount claimed for each item or service; OR 3 times the amount of the remuneration (if also AKS violation, CMP up to $74,792); and/or

– Exclusion

If DOJ prosecutes under AKS = criminal liability (which also leads to exclusion), or FCA liability, high penalties and 3 times damages.

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Risk Areas Transportation

Health Fairs/ baby showers/ free screening

Patient discounts – waiving obligations

Patient gifts and marketing practices

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Why does the government care? Cost concerns – may encourage the provision of

medically unnecessary services

Level playing field – larger providers can better afford inducements, which disadvantages smaller providers

Quality concerns – concern that money that should be used for patient care is diverted to fund illegal inducement, reducing quality

Sign of other compliance problems

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Beneficiary Inducement Exceptions Waivers of coinsurance and deductible amounts that are not

advertised, not routinely waived, individual determination of

financial need

Incentives to individuals to promote the delivery of preventive care

services

– Cannot be tied to the provision of other services.

– No cash or cash equivalents.

– No disproportionally large incentives.

Properly disclosed copay differentials in health plans

Reduction of copay amounts for covered OPD services under 1833(t)(8)(B) (20-year-old statutory exception, just added to regs in December 2016)

AKS safe harbors

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New Bene Inducement Exceptions Remuneration that promotes access to care and

pose low risk of harm

Financial hardship exception (reasonable connection to individual’s medical care)

Retailer coupons, rebates, or other retailer rewards

Part D Plan sponsor’s first fill generics copay waivers

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Promotes Access to Care/ Low Risk of Harm Items or services that improve a beneficiary’s ability

to obtain items and services payable by Medicare or Medicaid, and pose a low risk of harm to Medicare and Medicaid beneficiaries and the programs by—

(i) Being unlikely to interfere with, or skew, clinical decision making;

(ii) Being unlikely to increase costs to Federal health care programs or beneficiaries through overutilization or inappropriate utilization; and

(iii) Not raising patient safety or quality-of-care concerns.

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Hypothetical 1

A hospital (or other provider or supplier) hosts an informational program to help patients with diabetes learn more about controlling their disease.

To encourage participation, dinner will be provided.

Hospital will also give away flash drives, note pads, and tote bags with the hospital logo.

Does any of this violate the beneficiary inducement prohibition?

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Hypothetical 1 – Analysis

Informational program?

–OIG does not consider educational materials to be remuneration.

– A provider or supplier may offer educational materials (such as written materials about disease states or treatments), or informational programs (such as a program to help patients with asthma or diabetes learn more about controlling their diseases) to patients or prospective patients without implicating the beneficiary inducement CMP. 81 Fed. Reg. at 88,396.

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Hypothetical 1 – Analysis (cont.)

Dinner?

– De Minimis Exception?

– OIG warned about offering attendees of educational program items/services of more than nominal value that offeror knows or should know is likely to influence the patient to choose that provider. 81 Fed. Reg. at 88,396.

– Giving patients the tools they need to remove barriers.

Interpretation does not incorporate concept of rewarding patients for accessing care; protects items or services that should improve a patient’s ability to access care and treatment, not inducements to seek care.” 81 Fed. Reg. at 88,393.

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Flash drives, note pads, and tote bags with logo?

– Remuneration given in connection with marketing is not low risk and therefore would not be protected under this exception. Such remuneration is given for the purpose of influencing and may induce overutilization or inappropriate utilization. 81 Fed. Reg. at 88,396.

– OIG warning about offering items/services of more than nominal value at such programs.

– De Minimis Exception?

Nominal value threshold of $15 per item? $75 per year? Other events during year to consider?

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Hypothetical 2

Hospital wants to encourage patients to go to their follow-up appointments. It is considering—

–Reimbursing parking expenses or providing free child care during appointments.

–Offering movie tickets to a patient for attending an appointment (reward for receiving care).

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Items/ services that “promote access to care” give patients the tools they need to remove barriers.

Does not incorporate the concept of rewarding patients for accessing care; the exception protects items or services that should improve a patient’s ability to access care and treatment, not inducements to seek care.

81 Fed. Reg. at 88,392–88,393.

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Hypothetical 2 – Analysis (cont.) Examples Items/services that promote access to care:

–Purchasing web-based food/activity trackers for diabetic patients.

–Reimbursing parking expenses or providing free child care during appointments.

Items or services that do not promote access to care:

–Offering movie tickets to a patient for attending an appointment (reward for receiving care).

–Offering patients a $20 gift card for selecting specific provider to perform a procedure.

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OIG explained the distinction between promoting access to care and rewarding access to care:

“A patient might not be able to attend the appointment without child care assistance, but the movie tickets do not improve the patient’s ability to attend the appointment.”

81 FR 88,392.

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Financial-Need-Based Exception The offer or transfer of items or services for free

or less than fair market value by a person, if—

(i) Not offered as part of advertisement or solicitation

(ii) Not tied to the provision of other items or services reimbursed in whole or in part by the programs

(iii) Reasonable connection between the items or services and the individual’s medical care; and

(iv) Only provided after determining in good faith that the individual is in financial need.

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Overlap with “Promotes Access to Care?”

Overlap among “financial need based,” “promotes access to care,” and “promotes the delivery of preventive care.”

Distinctions among these exceptions.

– Financial-need-based exception does not require that the remuneration “promote access to care,” or “promote the delivery of preventive care.”

– Those two other exceptions do not require that the recipient of the remuneration have a financial need.

– “Remuneration might meet some criteria of multiple exceptions, but it is protected only if it meets all criteria of any one exception.” 81 Fed. Reg. 88,402.

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Hypothetical 3

A doctor asks a patient who had Medicaid to track his activity in a health app that will send the info to the doctor. The patient cannot afford the app. The provider gives the patient a voucher to buy the app.

Would this be allowed?

Can the hospital do this for all patients who receive Medicaid?

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Financial Need Criteria:

–Advertised?

– Tied to the provision of other items or services?

–Reasonable connection to the individual’s medical care?

– Is the individual in financial need?

Is the voucher a cash equivalent? Is it only for that specific app? Or is it a gift card?

All Medicaid patients? No. Financial Need Based Exception requires an individualized determination.

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The Financial Need Based exception is not designed to induce the patient to seek additional care, but rather to help financially needy individuals access items or services connected to their medical care. 81 Fed. Reg. 88,403.

“Reasonable connection to medical care of the individual” can be interpreted broadly.

– Can include items related to prevention of illness or injury, or medical treatment (e.g., extra bandages for wound care), or items crucial to a patient’s safety (such as car seats for infants)

– Not everything beneficial to a patient is connected to medical care (e.g., school backpack not connected)

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Depending on individual circumstances, could be reasonably connected to a particular patient’s medical care—car seats, diapers, specialized clothing, baby formula or particular food items, books, weight monitors, gas cards, and glucose monitors.

Not reasonably connected to individual’s medical care— strollers, school supplies, and (usually) toys or clothing.

– But these items (among others) may fit under another exception—for example they can be offered to patients who attend necessary preventive care appointments. 81 Fed. Reg. 88,403.

52

When two exceptions could apply? Example: promotes access to care vs local transportation safe

harbor vs financial need?

OIG recognized overlap, noted distinctions, said must meet all requirements of one exception to be protected.

When an arrangement could be protected under promotes access to care and another exception, the more specific exception applies:

– “[The promotes access to care] exception should be read in the context of those more specific exceptions and safe harbors: We would look to other applicable exceptions to consider whether the remuneration in question poses a low risk of harm.” 81 Fed. Reg. at 88,390-91.

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When two exceptions could apply? (cont.)

For free transportation that promotes access to care

– Local transportation safe harbor includes requirements OIG finds necessary for transportation to be “low risk.”

OIG recognizes the need for case-by-case analysis.

Takeaway: the Promotes Access to Care exception will allow many more opportunities to provide items and services to increase access to care, but it will not significantly expand existing exceptions.

– Anyone asserting the promotes access to care exception as a defense will have the burden of presenting sufficient facts and analysis for OIG to determine whether the arrangement meets the exception.

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When two exceptions could apply? (cont.)

For free transportation that promotes access to care

– Local transportation safe harbor includes requirements OIG finds necessary for transportation to be “low risk.”

OIG recognizes the need for case-by-case analysis.

Takeaway: the Promotes Access to Care exception will allow many more opportunities to provide items and services to increase access to care, but it will not significantly expand existing exceptions.

– Anyone asserting the promotes access to care exception as a defense will have the burden of presenting sufficient facts and analysis for OIG to determine whether the arrangement meets the exception.

55

Questions?

Jill Wright

Foley & Lardner, LLP

3000 K Street, N.W., Suite 600

Washington, DC 20007

202-945-6064

[email protected]

www.foley.com

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