On January 19, 2021, a final rule promulgated by the Department of Health and Human Services Office of Inspector General (HHS OIG) took effect, updating the safe harbors under the Federal Anti-Kickback Statute (AKS) and adding a new exception to the Beneficiary Inducements Civil Monetary Penalties (CMP).
The hope of the final rule is that it will protect certain value-based arrangements and improve quality of care, outcomes, and efficiencies. HHS OIG suggests in the final rule that continuing to allow for increased flexibility will help stakeholders respond to, and recover from, the COVID-19 pandemic and allow for sustainable value-based care delivery models in the future.
Value-Based Safe Harbors
Three new safe harbors are created within the final rule for remuneration among or between participants in a value-based arrangement: (1) care coordination arrangements; (2) value-based arrangements with substantial downside financial risk; and (3) value-based arrangements with full financial risk.
Each of the new safe harbors varies based on what type of remuneration is protected (increased flexibility to parties as more downside financial risk is assumed), the types of entities that can rely on them, the level of financial risk assumed by the parties, and the safeguards included as conditions. The definitions applicable to the value-based harbors mostly track with the definitions applicable to the value-based exceptions under the Stark Law.
The tiered structure was put in place to support the way industry payments are moving and also in recognition that arrangements with a higher level of downside financial risk for those in a position to make referrals or order products/services could curb fee-for-service incentives to order medically unnecessary or overly costly goods/services.
Additional New Safe Harbors
The rule creates four additional safe harbors, to include: (1) patient engagement and support safe harbor; (2) CMS-sponsored models safe harbor; (3) cybersecurity technology and services safe harbor; and (4) Medicare shared savings ACO beneficiary incentives.
Patient Engagement and Support Safe Harbor
Under the Patient Engagement and Support Safe Harbor, participants in value-based enterprises can provide non-monetary tools and supports to a patient in a target patient population to coordinate care and improve quality and health outcomes. This safe harbor uses the same ineligible entities list as the value-based safe harbors and also includes a pathway for manufacturers of devices or medical supplies to provide digital health technology. An example of this would be a doctor’s office giving low-income patients transit cards or taxi vouchers to encourage them to come in for their mammogram screening.
CMS-Sponsored Models Safe Harbor
This finalized safe harbor is for CMS-sponsored model arrangements and CMS-sponsored model patient incentives that would require OIG fraud and abuse waivers. This safe harbor aims to reduce the need for the Office of Inspector General to issue separate fraud and abuse waivers for new CMS-sponsored healthcare delivery models and is intended to provide greater predictability for model participants and uniformity across models. An example under this safe harbor is a Medicare Shared Savings program providing diabetic beneficiaries with glucose meters to monitor their blood sugar levels.
Cybersecurity Technology and Services Safe Harbor
The Cybersecurity Technology and Services Safe Harbor will protect non-monetary donations in the form of certain cybersecurity technology and services to facilitate improved cybersecurity in healthcare and guard against potential security threats. For example, if a hospital donates cybersecurity encryption software to a smaller doctor office to ensure the secure transfer of patient’s protected health information. This safe harbor is available to all individuals and entities.
Medicare Shared Savings ACO Beneficiary Incentives
This new safe harbor is codification of the statutory exception of remuneration related to incentive payments to assigned Medicare beneficiaries under an Accountable Care Organization’s Beneficiary Incentive Program.
Modified Safe Harbors
In addition to the above new safe harbors, the final rule modifies several existing safe harbors: (1) electronic health records; (2) personal services and management contracts and outcome-based payments; (3) warranties; and (4) local transportation.
Electronic Health Records
Several changes were made to the electronic health records (EHR) safe harbor, including updated and removed provisions regarding interoperability, a removed sunset provision and prohibition on donation of equivalent technology, and clarification on the protections for cybersecurity technology and services included in an EHR arrangement.
Personal Services and Management Contracts and Outcome-Based Payments
Under the modified safe harbor, part-time or sporadic arrangements can allow for more flexibility now that the requirement that the agreement outline in advance the exact schedule and length of services, complete with the charge for the intervals, is removed. The modification also expands the safe harbor to include protection for “outcomes-based payment” arrangements, which is tied to achieving measurable outcomes that either improve patient or population health or reduce payor costs. Entities that are ineligible for the value-based safe harbors are also ineligible for this safe harbor.
Warranties
Under the modified safe harbor, the definition of “warranty” has been revised to include an affirmation of fact or written promise relating to bundled items and related services, such as a drug manufacturer’s offer to a hospital of a warranty program that covers self-injected drug products and education services as reimbursable under a bundled prospective payment model.
Local Transportation
The local transportation safe harbor is modified to expand mileage limits for rural areas up to 75 miles, eliminate mileage limits for transportation to bring patients recently discharged from the hospital home, and clarifies that the safe harbor is available for transportation provided through rideshare arrangements.