Health Law Daily New safe harbors proposed in revision of anti-kickback rules
Wednesday, October 9, 2019

New safe harbors proposed in revision of anti-kickback rules

By Cathleen Calhoun, J.D.

Five new safe harbors plus four revised safe harbors may add up to more options.

In an advance release of proposed rule changes on safe harbors under the anti-kickback statute and the civil monetary penalty on beneficiary inducements (sometimes called the Stark law), the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS), in conjunction with the Department of Health and Human Services’ Regulatory Sprint to Coordinated Care, proposes more safe harbors and the expansion of current safe harbors. The notice, entitled "Revisions to the Safe Harbors Under the Anti-Kickback Statute and Civil Monetary Penalty Rules Regarding Beneficiary Inducements" outlines a large number of proposed changes and comes after the agencies began receiving comments on the topics in 2018.

Anti-kickback and CMP. The federal anti-kickback statute (42 U.S.C. § 1320a-7b(b)) allows criminal penalties for knowingly and willfully offering, paying, soliciting, or receiving remuneration to induce or reward the referral of business reimbursable under any of the federal health care programs, including Medicare and Medicaid. The civil monetary penalty (CMP) on beneficiary inducements (42 U.S.C. § 1320a-7a(a)(5)) prohibits beneficiary inducements and provides for penalties against any person who offers or transfers remuneration to a Medicare or state healthcare program beneficiary that the person knows (or should know) is likely to influence the beneficiary’s choice of a provider, practitioner, or supplier for which payment may be made by Medicare or a state healthcare program.

2018 request for comments. In 2018, the OIG issued a notice seeking to find ways to modify or add new safe harbors to the anti-kickback statute and to provide exceptions to the beneficiary inducements civil monetary penalty (CMP) definition of ‘‘remuneration.’’ The OIG stated that its purpose in doing so was to help in the creation of arrangements that promote care coordination and advance the delivery of value-based care, while continuing to protect against harms caused by fraud and abuse. The OIG received a response to its request and created its new proposed revisions to the rules on the topics as a result.

Proposed changes. HHS stated that it has found the broad reach of the federal anti-kickback statute and the CMP for beneficiary inducements inhibit beneficial arrangements that would help the transition to value-based care and improve the coordination of patient care among providers. The proposed changes include:

  • Proposed new safe harbors. First, three new safe harbors are proposed for certain remuneration exchanged between or among eligible participants in a value-based arrangement that is described as fostering better coordinated and managed patient care:

  1. Care Coordination Arrangements to Improve Quality, Health Outcomes, and Efficiency (§ 1001.952(ee))
  2. Value-Based Arrangements With Substantial Downside Financial Risk (§ 1001.952(ff))
  3. Value-Based Arrangements With Full Financial Risk (§ 1001.952(gg))

Also, a new safe harbor (§ 1001.952(hh)) is proposed for certain tools and supports furnished to patients to improve quality, health outcomes, and efficiency, and a new safe harbor is proposed for donations of cybersecurity technology and services (§ 1001.952(jj)).

  • Proposed modifications to current safe harbors. A number of modifications to existing safe harbors are proposed including:

  1. Modifications to existing safe harbor for electronic health records items and services (§ 1001.952(y)) to add protections for certain related cybersecurity technology, to update provisions regarding interoperability, and to remove the sunset date.
  2. Modifications to existing safe harbor for personal services and management contracts (§ 1001.952(d)) to add flexibility with respect to outcomes-based payments and part-time arrangements.
  3. Modifications to existing safe harbor for warranties (§ 1001.952(g)) to revise the definition of "warranty" and provide protection for bundled warranties for one or more items and related services.
  4. Modifications to the existing safe harbor for local transportation (§ 1001.952(bb)) to expand and modify mileage limits for rural areas and for transportation for patients discharged from inpatient facilities.
  • Accountable care organizations (ACO). A proposal is made to codify the statutory exception to the definition of "remuneration" related to ACO Beneficiary Incentive Programs for the Medicare Shared Savings Program (§ 1001.952(kk)).
  • Telehealth. For certain in-home dialysis patients, a proposed amendment is made to the definition of "remuneration" that interprets and incorporates a new statutory exception to the prohibition on beneficiary inducements for "telehealth technologies."

Comment period. The proposed rules will have a 75-day comment period that will begin from the date of publication in the federal register. Comments may be submitted by mail, by hand or courier, or electronically (

MainStory: TopStory NewsStory ComplianceNews CMSNews AntikickbackNews CMPNews FraudNews

Back to Top

Interested in submitting an article?

Submit your information to us today!

Learn More

Health Law Daily: Breaking legal news at your fingertips

Sign up today for your free trial to this daily reporting service created by attorneys, for attorneys. Stay up to date on health legal matters with same-day coverage of breaking news, court decisions, legislation, and regulatory activity with easy access through email or mobile app.