October 07, 2014

OIG Proposes Measures to Improve Access to Care

In the Federal Register (79 Fed. Reg. 59717) on October 3, 2014, the Department of Health and Human Services Office of Inspector General (OIG) proposed changes to the Anti-Kickback Statute (AKS) and the civil monetary penalty (CMP) rules. The goal of the proposed changes is to protect beneficial arrangements that enhance the efficient and effective delivery of health care and promote the best interests of patients, while also protecting the federal health care programs and beneficiaries from the risk of harm associated with referral payments. Specifically, OIG proposed five new safe harbors to the AKS and the CMP regulations. It also suggested revisions to the definition of "remuneration" in the CMP and the addition of a gain-sharing CMP provision.   

The proposed rule would add two new provisions to protect cost-sharing waivers that pose low risk of harm to the federal health care programs. The first of these provisions would codify the sections of the Medicare Modernization Act (MMA) that except from liability under the AKS waivers or reductions by pharmacies of any cost-sharing imposed under Medicare Part D, as long as certain conditions are met. The proposed provision provides a safe harbor for pharmacy waivers of cost sharing for financially needy Medicare Part D beneficiaries. The pharmacy waiving part D cost-sharing would qualify for safe harbor protection if: (i) the waiver or reduction is not advertised or part of a solicitation; (ii) the pharmacy does not routinely waive the cost sharing; and (iii) before waving the cost sharing, the pharmacy either determines in good faith that the beneficiary has a financial need or the pharmacy fails to collect the cost-sharing amount after making a reasonable effort to do so. If, however, the waiver or reduction of cost-sharing is made on behalf of a subsidy-eligible individual (as defined in section 1860D-14(a)(3) of the Social Security Act), conditions (ii) and (iii) above are not required.

The second proposed provision protecting a cost-sharing waiver would provide a safe harbor for certain reductions or waivers of coinsurance or deductible amounts owed for emergency ambulance services to an ambulance supplier that is owned by a state or municipality. The OIG has issued numerous favorable advisory opinions approving these types of arrangements. Under the proposed safe harbor, the ambulance service waiving the cost sharing qualifies for safe harbor protection if: (i) the ambulance service is owned and operated by a state or a political subdivision and is a Medicare Part B provider or supplier or emergency ambulance services; (ii) the ambulance service offers the cost sharing reduction or waiver on a uniform basis, without regard to patient specific factors; and (iii) the ambulance service refrains from claiming the amount reduced or waived as bad debt for payment purposes under Medicare or a state health care program or otherwise shifting the burden of the reduction or waiver onto Medicare, a state health care program, other payors, or individuals. OIG is also considering extending this safe harbor beyond the Medicare program to include reductions or waivers of cost sharing amounts owed under other federal health care programs (i.e., Medicaid) and is soliciting comments on this consideration.

The third safe harbor included in the proposed rule relates to certain remuneration between Medicare Advantage (MA) organizations and federally qualified health centers that provide services to individuals enrolled in a MA plan. The safe harbor codifies Section 237 of the MMA which requires that the written agreement between the MA organization and the FQHC specifically provide the MA organization "will pay the contracting FQHC no less than the level and amount of payment that the plan would make for the same services if the services we furnished by another type of entity."

The next safe harbor included in the proposed rule would codify Section 3301(d) of the Affordable Care Act which protects discounts provided for under the Medicare Coverage Gap Discount Program. The safe harbor would protect discounts in the price of an "applicable drug" of a manufacturer that is furnished to an "applicable beneficiary" under the Medicare Coverage Gap Discount Program, as long as the manufacturer participates in, and is in full compliance with, all requirements of the program. The terms "applicable drug" and "applicable beneficiary" are defined as set forth in Section 1860D-14A(g) of the Act. 

The final safe harbor included in the proposed rules would provide protection for certain free or discounted local transportation services provided to federal health care program beneficiaries to obtain medically necessary items and services. The party providing the free or discounted local transportation services would qualify for safe harbor protection if the free or discounted local transportation services: (i) are only made available to established patients; (ii) are determined in a manner unrelated to the past or anticipated volume or value of federal health care program business; (iii) do not include air, luxury or ambulance level transportation; (iv) are not, in reality, a means for providers and suppliers to pay for recruitment of patients; and (v) the distance the patient is transported is no more than 25 miles. Additionally, the free or discounted local transportation services can only be provided "Eligible Entities." As defined in the proposed rule, the term "Eligible Entity" includes any individual or entity except: (i) individuals or entities that primarily supply health care items (i.e., durable medical equipment); and (ii) laboratories. OIG is soliciting comments on additional types of individuals and entities that should be excluded from the definition of Eligible Entities.

In addition to adding the safe harbors described above, the proposed rule would amend the CMP regulations in two ways. First, the proposed rules would amend the definition of "remuneration" by adding certain statutory exceptions, such as: (i) copayment reductions for certain outpatient hospital services; (ii) certain remuneration that poses a low risk of harm and promotes access to care; (iii) coupons, rebates or other retailer reward programs that meet specified requirements; (iv) certain remuneration to financially needy individuals; and (v) copayment waivers for the first fill of generic drugs. Second, the proposed rule would codify the gain-sharing CMP by interpreting terms used in the CMP regulations and adding a definition of "hospital" to the regulations. The new definition of "hospital" would refer to the definitions of "hospital" and "critical access hospital" in the Act. OIG is also considering a narrower interpretation of the term "reduce or limit services" than it currently uses. While it is not proposing a new definition of "reduce or limit services" at this time, the OIG is specifically requesting comments on the following related areas of concern:

  • Whether OIG should continue to interpret the prohibition on payments to reduce or limit services as including payments to limit items used in providing services
  • Whether a hospital's decision to standardize certain items (e.g., surgical instruments, medical devices or drugs) should be deemed to constitute reducing or limiting care and whether the answer would be different if physicians were simply encouraged to choose from the standardized items, but other items remained available for use
  • Whether a hospital's decision to rely on protocols based upon objective quality metrics for certain procedures should ever be deemed to constitute reducing or limiting care
  • Whether a hospital desiring to standardize items or processes as part of a gain-sharing program should be required to establish certain thresholds based upon historical experience or clinical protocols, beyond which participating physicians could not share in cost savings
  • Whether any potential regulation defining "reduce or limit services" should include a requirement that the hospital and/or physician participating in a gainsharing program notify potentially affected patients about the program

Comments on the proposed rule are due December 2, 2014.

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