Medicare and State Health Care Programs: Fraud and Abuse; Revisions to Safe Harbors Under the Anti-Kickback Statute, and Civil Monetary Penalty Rules Regarding Beneficiary Inducements and Gainsharing, 59717-59733 [2014-23182]
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not impose additional requirements
beyond those imposed by state law. For
that reason, this proposed action:
• is not a ‘‘significant regulatory
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1999);
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request, associated maintenance plan,
and MVEBs for transportation
conformity purposes for the Baltimore
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does not have tribal implications as
specified by Executive Order 13175 (65
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List of Subjects
40 CFR Part 52
Environmental protection, Air
pollution control, Incorporation by
reference, Nitrogen oxides, Particulate
matter, Reporting and recordkeeping
requirements, Sulfur oxides, Volatile
organic compounds.
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40 CFR Part 81
Environmental protection, Air
pollution control, National parks,
Wilderness areas.
Authority: 42 U.S.C. 7401 et seq.
Dated: September 15, 2014.
William C. Early,
Acting Regional Administrator, Region III.
[FR Doc. 2014–23638 Filed 10–2–14; 8:45 am]
BILLING CODE 6560–50–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Office of Inspector General
42 CFR Parts 1001 and 1003
RIN 0936–AA06
Medicare and State Health Care
Programs: Fraud and Abuse;
Revisions to Safe Harbors Under the
Anti-Kickback Statute, and Civil
Monetary Penalty Rules Regarding
Beneficiary Inducements and
Gainsharing
Office of Inspector General
(OIG), HHS.
ACTION: Proposed rule.
AGENCY:
This proposed rule would
amend the safe harbors to the antikickback statute and the civil monetary
penalty (CMP) rules under the authority
of the Office of Inspector General (OIG).
The proposed rule would add new safe
harbors, some of which codify statutory
changes set forth in the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) and
the Patient Protection and Affordable
Care Act, Public Law 111–148, 124 Stat.
119 (2010), as amended by the Health
Care and Education Reconciliation Act
of 2010, Public Law 111–152, 124 Stat.
1029 (2010) (ACA), and all of which
would protect certain payment practices
and business arrangements from
criminal prosecution or civil sanctions
under the anti-kickback statute. We also
propose to codify revisions to the
definition of ‘‘remuneration,’’ added by
the Balanced Budget Act (BBA) of 1997
and ACA, and add a gainsharing CMP
provision in our regulations.
DATES: To ensure consideration,
comments must be delivered to the
address provided below by no later than
5 p.m. Eastern Standard Time on
December 2, 2014.
ADDRESSES: In commenting, please
reference file code OIG–403–P3.
Because of staff and resource
limitations, we cannot accept comments
by facsimile (FAX) transmission.
SUMMARY:
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However, you may submit comments
using one of three ways (no duplicates,
please):
1. Electronically. You may submit
electronically through the Federal
eRulemaking Portal at https://
www.regulations.gov. (Attachments
should be in Microsoft Word, if
possible.)
2. By regular, express, or overnight
mail. You may mail your printed or
written submissions to the following
address:
Patrice Drew, Office of Inspector General,
Department of Health and Human Services,
Attention: OIG–403–P, Room 5269, Cohen
Building, 330 Independence Avenue SW.,
Room 5269, Washington, DC 20201.
Please allow sufficient time for mailed
comments to be received before the
close of the comment period.
3. By hand or courier. You may
deliver, by hand or courier, before the
close of the comment period, your
printed or written comments to:
Patrice Drew, Office of Inspector General,
Department of Health and Human Services,
Cohen Building, 330 Independence Avenue
SW., Room 5269, Washington, DC 20201.
Because access to the interior of the
Cohen Building is not readily available
to persons without Federal Government
identification, commenters are
encouraged to schedule their delivery
with one of our staff at (202) 619–1368.
Inspection of Public Comments: All
comments received before the end of the
comment period will be posted on
https://www.regulations.gov for public
viewing. Hard copies will also be
available for public inspection at the
Office of Inspector General, Department
of Health and Human Services, Cohen
Building, 330 Independence Avenue
SW., Washington, DC 20201, Monday
through Friday from 8:30 a.m. to 4 p.m.
To schedule an appointment to view
public comments, phone (202) 619–
1368.
FOR FURTHER INFORMATION CONTACT:
Heather Westphal, Office of Counsel to
the Inspector General, (202) 619–0335,
for questions relating to the proposed
rule.
Executive Summary
A. Need For Regulatory Action
MMA and ACA include exceptions to
the anti-kickback statute, and BBA of
1997 and ACA include exceptions to the
definition of ‘‘remuneration’’ under the
civil monetary penalties law. OIG
proposes to codify those changes here.
At the same time, OIG proposes
additional changes to make technical
corrections to an existing regulation and
proposes new safe harbors to the anti-
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Federal Register / Vol. 79, No. 192 / Friday, October 3, 2014 / Proposed Rules
kickback statute to protect certain
services that the industry has expressed
an interest in offering and that we
believe could be, if properly structured
and with appropriate safeguards, low
risk to Federal health care programs.
Finally, the civil monetary penalties law
includes a gainsharing CMP provision
that has yet to be codified in
regulations. We propose to interpret and
codify that provision in this proposed
rule.
B. Summary of Major Provisions
1. Anti-Kickback Statute and Safe
Harbors
We propose to amend 42 CFR
1001.952 by modifying certain existing
safe harbors to the anti-kickback statute
and by adding safe harbors that provide
new protections or codify certain
existing statutory protections. These
changes include:
• A technical correction to the
existing safe harbor for referral services;
• protection for certain cost-sharing
waivers, including:
• Pharmacy waivers of cost-sharing
for financially needy Medicare Part D
beneficiaries; and
• waivers of cost-sharing for
emergency ambulance services
furnished by State- or municipalityowned ambulance services;
• protection for certain remuneration
between Medicare Advantage
organizations and federally qualified
health centers;
• protection for discounts by
manufacturers on drugs furnished to
beneficiaries under the Medicare
Coverage Gap Discount Program; and
• protection for free or discounted
local transportation services that meet
specified criteria.
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2. Civil Monetary Penalty Authorities
We propose to amend the definition
of ‘‘remuneration’’ in the CMP
regulations at 42 CFR 1003 by adding
certain statutory exceptions for:
• Copayment reductions for certain
hospital outpatient department services;
• certain remuneration that poses a
low risk of harm and promotes access to
care;
• coupons, rebates, or other retailer
reward programs that meet specified
requirements;
• certain remuneration to financially
needy individuals; and
• copayment waivers for the first fill
of generic drugs.
We also propose to codify the
gainsharing CMP set forth in section
1128A(b) of the Social Security Act (the
Act) (42 U.S.C. 1320a–7a(b)).
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C. Costs and Benefits
There are no significant costs
associated with the proposed regulatory
revisions that would impose any
mandates on State, local, or tribal
governments or on the private sector.
SUPPLEMENTARY INFORMATION: This
notice of proposed rulemaking is part of
a rulemaking that was identified in the
Unified Agenda by the title ‘‘Medicare
and State Health Care Programs: Fraud
and Abuse; Revisions to the Office of
Inspector General’s Safe Harbors Under
the Anti-Kickback Statute, Exclusion
Authorities, and Civil Monetary Penalty
Rules.’’ OIG has proposed additional
rulemaking in the following areas: CMP
authorities (42 CFR part 1003); inflation
adjustment for CMPs (42 CFR part
1003); and exclusion authorities and the
duties and responsibilities of State
Medicaid Fraud Control Units (MFCUs)
42 CFR parts 1000, 1001, 1002, and
1006. Each of the proposed rules is a
stand-alone, independent rule, and thus,
one can comment meaningfully on this
proposed rule independent of the
proposed rules concerning CMP
authorities, inflation adjustment for
CMPs, exclusion authorities, or
authorities and duties of the MFCUs.
I. Background
A. Anti-Kickback Statute and Safe
Harbors
Section 1128B(b) of the Act (42 U.S.C.
1320a–7b(b), the anti-kickback statute)
provides criminal penalties for
individuals or entities that knowingly
and willfully offer, pay, solicit, or
receive remuneration in order to induce
or reward the referral of business
reimbursable under Federal health care
programs, as defined in section 1128B(f)
of the Act. The offense is classified as
a felony and is punishable by fines of
up to $25,000 and imprisonment for up
to 5 years. Violations may also result in
the imposition of CMPs under section
1128A(a)(7) of the Act (42 U.S.C. 1320a–
7a(a)(7)), program exclusion under
section 1128(b)(7) of the Act (42 U.S.C.
1320a–7(b)(7)), and liability under the
False Claims Act (31 U.S.C. 3729–33).
The types of remuneration covered
specifically include, without limitation,
kickbacks, bribes, and rebates, whether
made directly or indirectly, overtly or
covertly, in cash or in kind. In addition,
prohibited conduct includes not only
the payment of remuneration intended
to induce or reward referrals of patients,
but also the payment of remuneration
intended to induce or reward the
purchasing, leasing, or ordering of, or
arranging for or recommending the
purchasing, leasing, or ordering of, any
good, facility, service, or item
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reimbursable by any Federal health care
program.
Because of the broad reach of the
statute, concern was expressed that
some relatively innocuous commercial
arrangements were covered by the
statute and, therefore, potentially
subject to criminal prosecution. In
response, Congress enacted section 14 of
the Medicare and Medicaid Patient and
Program Protection Act of 1987, Public
Law 100–93 (section 1128B(b)(3)(E) of
the Act), which specifically requires the
development and promulgation of
regulations, the so-called safe harbor
provisions, that would specify various
payment and business practices that
would not be treated as criminal
offenses under the anti-kickback statute,
even though they may potentially be
capable of inducing referrals of business
under the Federal health care programs.
Section 205 of the Health Insurance
Portability and Accountability Act of
1996, Public Law 104–191, established
section 1128D of the Act, which
includes criteria for modifying and
establishing safe harbors. Specifically,
section 1128D(a)(2) of the Act provides
that, in modifying and establishing safe
harbors, the Secretary of Health and
Human Services (Secretary) may
consider whether a specified payment
practice may result in:
• An increase or decrease in access to
health care services;
• an increase or decrease in the
quality of health care services;
• an increase or decrease in patient
freedom of choice among health care
providers;
• an increase or decrease in
competition among health care
providers;
• an increase or decrease in the
ability of health care facilities to provide
services in medically underserved areas
or to medically underserved
populations;
• an increase or decrease in the cost
to Federal health care programs;
• an increase or decrease in the
potential overutilization of health care
services;
• the existence or nonexistence of any
potential financial benefit to a health
care professional or provider, which
benefit may vary depending on whether
the health care professional or provider
decides to order a health care item or
service or arrange for a referral of health
care items or services to a particular
practitioner or provider;
• any other factors the Secretary
deems appropriate in the interest of
preventing fraud and abuse in Federal
health care programs.
Since July 29, 1991, we have
published in the Federal Register a
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series of final regulations establishing
safe harbors in various areas.1 These
provisions have been developed ‘‘to
limit the reach of the statute somewhat
by permitting certain non-abusive
arrangements, while encouraging
beneficial or innocuous arrangements.’’
(56 FR 35952, 35958 (July 29, 1991).)
Many of the safe harbors create new
exemptions, while other safe harbors
interpret exceptions already
promulgated by statute.
Health care providers and others may
voluntarily seek to comply with safe
harbors so that they have the assurance
that their business practices will not be
subject to enforcement action under the
anti-kickback statute, the CMP provision
for anti-kickback violations, or the
program exclusion authority related to
kickbacks. We note, however, that
compliance with a safe harbor insulates
an individual or entity from liability
under the anti-kickback statute and the
beneficiary inducements CMP 2 only;
individuals and entities remain
responsible for complying with all other
laws, regulations, and guidance that
apply to their businesses. In authorizing
the Department of Health and Human
Services (Department or HHS) to protect
certain arrangements and payment
practices under the anti-kickback
statute, Congress intended the safe
harbor regulations to be updated
periodically to reflect changing business
practices and technologies in the health
care industry.
Section 101 of MMA added a new
section 1860D to the Act, establishing
the Part D prescription drug benefit in
the Medicare program. Section 101(e) of
MMA amends section 1128B(b)(3) of the
Act to permit pharmacies to waive or
reduce cost-sharing imposed under Part
D as long as specified conditions are
met. In addition, section 237 of MMA
added an exception to permit certain
remuneration between Medicare
Advantage organizations and federally
qualified health centers.
ACA also includes a number of
provisions that could affect liability
under the anti-kickback statute. Section
3301 of ACA establishes the Medicare
Coverage Gap Discount Program,
codified at new section 1860D–14A of
the Act (42 U.S.C. 1395w–114A).
Pursuant to this program, prescription
1 56 FR 35952 (July 29, 1991); 61 FR 2122 (Jan.
25, 1996); 64 FR 63518 (Nov. 19, 1999); 64 FR
63504 (Nov. 19, 1999); 66 FR 62979 (Dec. 4, 2001);
71 FR 45110 (Aug. 8, 2006); and 72 FR 56632 (Oct.
4, 2007).
2 Pursuant to section 1128A(i)(6)(B), any practice
permissible under the anti-kickback statute,
whether through statutory exception or regulations
issued by the Secretary, is also excepted from the
beneficiary inducements CMP.
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drug manufacturers have entered into
agreements with the Secretary to
provide certain beneficiaries access to
discounts on drugs at the point of sale.
Section 3301(d) of ACA amends the
anti-kickback statute to protect the
discounts provided for under the
Medicare Coverage Gap Discount
Program.
We are proposing to incorporate into
our regulations safe harbors for payment
and business practices permitted under
MMA and ACA, as well as proposing
new safe harbors pursuant to our
authority under section 14 of the
Medicare and Medicaid Patient and
Protection Act of 1987 to protect
practices that we view as posing a low
risk to Federal health care programs as
long as specified conditions are met.
B. Civil Monetary Penalty Authorities
1. Overview of OIG Civil Monetary
Penalty Authorities
In 1981, Congress enacted the CMP
law, section 1128A of the Act, as one of
several administrative remedies to
combat fraud and abuse in Medicare
and Medicaid. The law authorized the
Secretary to impose penalties and
assessments on persons who defrauded
Medicare or Medicaid or engaged in
certain other wrongful conduct. The
CMP law also authorized the Secretary
to exclude persons from Federal health
care programs (as defined in section
1128B(f)(1) of the Act) and to direct the
appropriate State agency to exclude the
person from participating in any State
health care programs (as defined in
section 1128(h) of the Act). Congress
later expanded the CMP law and the
scope of exclusion to apply to all
Federal health care programs, but the
CMP applicable to beneficiary
inducements remains limited to
Medicare and State health care program
beneficiaries. The Secretary delegated
the law’s CMP authorities to OIG. 53 FR
12993 (April 20, 1988). Since 1981,
Congress has created various other CMP
authorities covering numerous types of
fraud and abuse, many of which were
also delegated by the Secretary to OIG.
2. The Definition of ‘‘Remuneration’’
The BBA of 1997 and section
6402(d)(2)(B) of ACA amended the
definition of ‘‘remuneration’’ for
purposes of the beneficiary inducements
CMP at section 1128A(a)(5) of the Act,
as discussed below. We propose to
incorporate these changes into the
definition of ‘‘remuneration’’ under
proposed § 1003.110 3 (current
§ 1003.101).
3 The Secretary proposed a reorganization of Part
1003. See Notice of Proposed Rulemaking RIN
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3. The Gainsharing CMP
Public Law 99–509, the Omnibus
Budget Reconciliation Act (OBRA) of
1986, authorized the Secretary to
impose CMPs for certain incentive
payments made to physicians by
hospitals, risk-sharing health
maintenance organizations (HMOs), and
competitive medical plans. Over time,
this provision, section 1128A(b) of the
Act (the Gainsharing CMP), has been
amended to repeal the provisions
relating to HMOs and other risk-sharing
entities and to make various other
changes in terminology.4 See section
6003(g)(3) of Public Law 101–239,
OBRA of 1989; section 4204(a)(3) and
4731(b) of Public Law 101–508, OBRA
of 1990; and section 4201(c) of the BBA
of 1997.
Section 1128A(b)(1) prohibits a
hospital or a critical access hospital
from knowingly making a payment,
directly or indirectly, to a physician as
an inducement to reduce or limit
services provided to Medicare or
Medicaid beneficiaries who are under
the direct care of the physician. A
hospital or a critical access hospital that
makes such payment and the physician
who knowingly accepts such payment
are subject to CMPs of not more than
$2,000 for each beneficiary for whom
the payment is made.
II. Provisions of the Proposed Rule
A. Anti-Kickback Statute and Safe
Harbors
Below is a description of the
additional payment practices that we
are proposing to incorporate under 42
CFR 1001.952 pursuant to the
authorities cited under each heading
and the rationale for their inclusion in
this proposed rulemaking. Consistent
with the criteria set forth in section
1128D(a)(2) for modifying and
establishing safe harbors, our goal 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 undue
risk of harm associated with referral
payments. We seek to strike an
appropriate balance between protections
for beneficial arrangements and
safeguards to prevent unscrupulous
0936–AA04, Medicare and State Health Care
Programs: Fraud and Abuse; Revisions to the Office
of Inspector General’s Civil Monetary Penalty Rules,
published on May 12, 2014 (79 FR 27080) (CMP
NPRM); this proposed rule uses the section
designations proposed in the CMP NPRM, together
with current section numbers.
4 Requirements relating to physician incentive
plans in HMOs and other risk-sharing entities are
now set forth in section 1876(i) of the Act.
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individuals and entities from taking
advantage of the safe harbors to increase
costs to programs and patients or
compromise quality of care. We seek
comments on how best to do this with
respect to all of our proposals below.
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1. Referral Services
We propose to make a technical
correction to the safe harbor for referral
services, found at 42 CFR 1001.952(f).
This safe harbor originally required that
any fee a referral service charged a
participant be ‘‘based on the cost of
operating the referral service, and not on
the volume or value of any referrals to
or business otherwise generated by the
participants for the referral service
* * *’’. This language created an
unintended ambiguity, such that the
safe harbor could have been viewed as
permitting referral services to adjust
their fees on the basis of the volume of
referrals they make to the participants.
In 1999, we finalized a modification to
the language to clarify that the safe
harbor precludes protection for
payments from participants to referral
services that are based on the volume or
value of referrals to, or business
otherwise generated by, either party for
the other party. See 64 FR 63518, 63526
(Nov. 19, 1999). During subsequent
revisions to the safe harbor by which we
intended to make a technical correction
clarifying that OIG’s exclusion authority
applied to all Federal health care
programs rather than only to Medicare
and State health care programs, the
language in § 1001.952(f)(2)
inadvertently was changed to ‘‘* * * or
business otherwise generated by either
party for the referral service * * *.’’ See
67 FR 11928, 11929 and 11934 (Mar. 18,
2002). Therefore, we propose to make a
technical correction and revert to the
language in the 1999 final rule cited
above.
2. Cost-Sharing Waivers
Generally, the reduction or waiver of
Medicare or other Federal health care
program cost-sharing amounts may
implicate the anti-kickback statute. Our
concern about potentially abusive
waivers of cost-sharing amounts under
the anti-kickback statue is longstanding.
For example, we have previously stated
that providers and suppliers that
routinely waive Medicare cost-sharing
amounts for reasons unrelated to
individualized, good faith assessments
of financial hardship may be held liable
under the anti-kickback statute. See e.g.,
Special Fraud Alert, 59 FR 65372, 65374
(Dec. 19, 1994). Such waivers may
constitute prohibited remuneration to
induce referrals under the anti-kickback
statute, as well as violations of the CMP
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prohibition against inducements to
beneficiaries, found in section
1128A(a)(5) of the Act. We propose to
modify § 1001.952(k) by adding two
new subparagraphs to protect certain
cost-sharing waivers that pose a low risk
of harm and make technical corrections
to the introductory language to account
for new subparagraphs. In addition, we
note that subparagraph (k) is limited to
reductions or waivers of Medicare and
State health care program beneficiary
cost-sharing. We are considering and
solicit comments about expanding this
safe harbor to protect waivers under all
Federal health care programs, if
applicable, and subject to each of the
paragraphs below.
Part D Cost-Sharing Waivers by
Pharmacies
As noted in section I.A above, MMA
specifically amended section
1128B(b)(3) of the Act by adding a new
subparagraph (G) that excepts from
liability under the anti-kickback statute
waivers or reductions by pharmacies
(including pharmacies of the Indian
Health Service, Indian tribes, tribal
organizations, and urban Indian
organizations) of any cost-sharing
imposed under Medicare Part D, as long
as certain conditions are met. These
conditions are specified in clauses (i)
through (iii) of section 1128A(i)(6)(A) of
the Act, and we propose to interpret
them consistent with our regulations
interpreting these conditions in
paragraph (1) of the definition of
‘‘remuneration’’ at § 1003.101.
We propose to add a new
§ 1001.952(k)(3) reflecting this
exception to the anti-kickback statute.
Thus, consistent with the statute, a
pharmacy waiving Part D cost-sharing
qualifies for safe harbor protection if: (1)
The waiver or reduction is not
advertised or part of a solicitation; (2)
the pharmacy does not routinely waive
the cost-sharing; and (3) before waiving
the cost-sharing, the pharmacy either
determines in good faith that the
beneficiary has a financial need or the
pharmacy fails to collect the costsharing 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 Act), then
conditions (2) and (3) above are not
required. We reiterate, however, that
compliance with the conditions of this
safe harbor, as with all safe harbors,
protects a individual or an entity from
liability only under the anti-kickback
statute and the beneficiary inducements
CMP, pursuant to section 1128A(i)(6)(B)
of the Act. Providers, practitioners, and
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suppliers still must comply with other
laws, regulations, and Centers for
Medicare & Medicaid Services (CMS)
program rules.
Cost-Sharing Waivers for Emergency
Ambulance Services
Over the years, we have received
many advisory opinion requests
concerning the reduction or waiver of
coinsurance or deductible amounts
owed for emergency ambulance services
to an ambulance supplier that is owned
and operated by a State or a political
subdivision of a State, resulting in many
favorable advisory opinions (that is,
approving of such arrangements).
Notwithstanding the vast body of
favorable advisory opinions, we
continue to receive similar requests for
advisory opinions each year. In light of
this, pursuant to our authority under
section 1128B(b)(3)(E) of the Act, we
propose to establish a safe harbor to
protect those reductions or waivers that
meet all the conditions enumerated in
§ 1001.952(k)(4).
First, we propose to require that the
ambulance provider or supplier be
owned and operated by a State, a
political subdivision of a State, or a
federally recognized Indian tribe 5 and
be the Medicare Part B provider or
supplier of the emergency ambulance
services. We note that items and
services that are paid for directly or
indirectly by a government entity (i.e.,
‘‘free services’’) generally are not
reimbursable by Medicare,6 so we also
propose to limit the safe harbor
protection to situations in which a
provider’s or supplier’s reduction or
waiver of coinsurance or deductible is
not considered to be the furnishing of
services paid for directly or indirectly
by a government entity, subject to
applicable exceptions promulgated by
CMS. CMS has explained that certain
cost-sharing waivers do not constitute
the provision of free services:
A [State or local government] facility
which reduces or waives its charges for
patients unable to pay, or charges patients
only to the extent of their Medicare and other
health insurance coverage, is not viewed as
furnishing free services and may therefore
receive program payment.7
Notwithstanding the use of the term
‘‘facility,’’ CMS has confirmed that this
provision would apply to an ambulance
provider or supplier that was owned
5 Section 104 of the Federally Recognized Indian
Tribe List Act of 1994, Public Law 103–454, 108
Stat. 4791, requires the Secretary to publish a list
of all federally recognized Indian tribes on an
annual basis.
6 See 42 CFR § 411.8.
7 CMS Medicare Benefit Policy Manual, Pub. No.
100–02, ch. 16, § 50.3.1.
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and operated by a State or a political
subdivision of a State and that was the
Medicare Part B provider or supplier of
the emergency ambulance services.
We also would require that the
ambulance provider or supplier offer the
reduction or waiver on a uniform basis,
without regard to patient-specific
factors. In addition, we propose to
include an express prohibition against
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 payers,
or individuals. We solicit comments on
these proposed conditions.
For purposes of this safe harbor, we
plan to interpret the term ‘‘ambulance
provider or supplier’’ as a provider or
supplier of ambulance transport services
that furnishes emergency ambulance
services. The term would not include a
provider or supplier of ambulance
transport services that furnishes only
nonemergency transport services,
because the safe harbor would only
apply to the waiver of cost-sharing in
connection with emergency ambulance
services. We plan to interpret
‘‘emergency ambulance services’’ in a
manner consistent with the definition
given to that term in 42 CFR
1001.952(v)(4)(iv). We solicit comments
on this interpretation and on whether
these terms need to be expressly defined
in the regulatory text of this safe harbor.
Finally, we are considering whether
to include reductions or waivers of costsharing amounts owed under other
Federal health care programs (e.g.,
Medicaid) in the safe harbor. We solicit
comments on this consideration, and on
what additional or different safeguards,
if any, might be required to protect
against fraud, waste, and abuse.
This safe harbor would apply only to
situations in which the governmental
unit owns and operates the ambulance
provider or supplier; it would not apply
to contracts with outside ambulance
providers or suppliers. For example, if
a municipality contracted with an
outside ambulance provider or supplier
for rendering services to residents of its
service area, the municipality could not
require the ambulance provider or
supplier to waive the collection from
beneficiaries of out-of-pocket costsharing amounts unless the
municipality paid the cost-sharing
amounts owed or otherwise made
provisions for paying them.
3. Federally Qualified Health Centers
and Medicare Advantage Organizations
An individual enrolled in a Medicare
Advantage (MA) plan may receive
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services from a federally qualified
health center (FQHC) that has a written
agreement with the MA plan. Section
237 of MMA amended 42 U.S.C.
1395w–27(e) by adding a new paragraph
(3) regarding agreements between MA
organizations and FQHCs. This new
paragraph requires that the written
agreement between the two entities
specifically provide that 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 were
furnished by another type of entity.
Section 237 also added a new statutory
exception to the anti-kickback statute at
section 1128B(b)(3)(H) of the Act (42
U.S.C. 1320a–7b(b)(3)(H)). This
exception protects ‘‘any remuneration
between a federally qualified health
center (or an entity controlled by such
a health center) and an MA organization
pursuant to a written agreement
described in section 1853(a)(4) [of the
Act].’’ 8 We propose to incorporate this
exception into the safe harbor
regulations as new section 42 CFR
1001.952(z) and solicit comments on
this proposal.
4. Medicare Coverage Gap Discount
Program
Section 3301 of ACA establishes the
Medicare Coverage Gap Discount
Program, codified at section 1860D–14A
of the Act. Under this program,
prescription drug manufacturers enter
into an agreement with the Secretary to
provide certain beneficiaries access to
discounts on drugs at the point of sale.
Section 3301(d) of ACA amends the
anti-kickback statute by adding a new
subparagraph (J) to section 1128B(b)(3)
of the Act to protect the discounts
provided for under the Medicare
Coverage Gap Discount Program. To
codify this self-implementing exception
in our regulations, this proposed rule
would add a new paragraph (aa) to the
existing safe harbor regulations at 42
CFR 1001.952.
This new paragraph (aa) would
protect a discount in the price of an
‘‘applicable drug’’ of a manufacturer
that is furnished to an ‘‘applicable
beneficiary’’ under the Medicare
Coverage Gap Discount Program under
section 1860D–14A, as long as the
manufacturer participates in, and is in
full compliance with all requirements
of, the Medicare Coverage Gap Discount
Program. The proposed regulation
8 Section 1853(a)(4) of the Act (42 U.S.C. 1395w–
23(a)(4)) generally describes the payment rule for
FQHCs that provide services to patients enrolled in
MA plans that have an agreement with the FQHC,
including agreements required under 42 U.S.C.
1395w–27(e)(3).
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would incorporate by reference the
following definitions of the terms
‘‘applicable beneficiary’’ and
‘‘applicable drug’’ which were added by
a new section 1860D–14A(g) of the Act:
Applicable beneficiary means an
individual who, on the date of dispensing a
covered part D drug—
(A) is enrolled in a prescription drug plan
or [a Medicare Advantage Prescription Drug
(MA–PD)] plan;
(B) is not enrolled in a qualified retiree
prescription drug plan;
(C) is not entitled to an income-related
subsidy under section 1860D–14(a); and
(D) who—
(i) has reached or exceeded the initial
coverage limit under section 1860D–2(b)(3)
during the year; and
(ii) has not incurred costs for covered part
D drugs in the year equal to the annual outof-pocket threshold specified in section
1860D–2(b)(4)(B).
Applicable drug means, with respect to an
applicable beneficiary, a covered part D
drug—
(A) approved under a new drug application
under section 505(b) of the Federal Food,
Drug, and Cosmetic Act or, in the case of a
biologic product, licensed under section 351
of the Public Health Service Act (other than
a product licensed under subsection (k) of
such section 351); and
(B)(i) if the sponsor of the prescription
drug plan or the MA organization offering the
MA–PD plan uses a formulary, which is on
the formulary of the prescription drug plan
or MA–PD plan that the applicable
beneficiary is enrolled in;
(ii) if the [prescription drug plan (PDP)]
sponsor of the prescription drug plan or the
MA organization offering the MA–PD plan
does not use a formulary, for which benefits
are available under the prescription drug
plan or MA–PD plan that the applicable
beneficiary is enrolled in; or
(iii) is provided through an exception or
appeal.
5. Local Transportation
Pursuant to our authority at section
1128B(b)(3)(E) of the Act, we propose to
establish a new safe harbor at 42 CFR
1001.952(bb) to protect free or
discounted local transportation services
provided to Federal health care program
beneficiaries. We explored this issue in
the context of section 1128A(a)(5) in the
past. According to the Act’s legislative
history, in enacting section 1128A(a)(5)
of the Act, Congress intended that the
statute not preclude the provision of
complimentary local transportation of
nominal value (H.R. Conf. Rep. No. 104–
736 at 255 (1996)). We have interpreted
‘‘nominal value’’ to mean no more than
$10 per item or service or $50 in the
aggregate over the course of a year. (See
65 FR 24400, 24411; April 6, 2000.) As
we previously indicated, we were
concerned that this interpretation may
be overly restrictive in the context of
complimentary local transportation.
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Accordingly, we solicited public input
on a number of issues as they related to
a possible exception to section
1128A(a)(5) of the Act (via 1128A(i)(6))
for complimentary local transportation.
(67 FR 72892; Dec. 9, 2002) (2002
Solicitation). However, ultimately we
did not propose or finalize an exception
for complimentary local transportation.
On the basis of our experience in the
years since the 2002 Solicitation and
our continued concern that our
interpretation of ‘‘nominal value’’ in the
context of complimentary local
transportation may be overly restrictive,
we are proposing a safe harbor to the
anti-kickback statute to protect not only
certain free local transportation but also
discounted local transportation that
meets certain conditions. As explained
above, by operation of section
1128A(i)(6)(B), practices permissible
under the safe harbor would also be
excepted from the definition of
‘‘remuneration’’ in section 1128A(i)(6)
of the Act.
The proposed safe harbor would
protect free or discounted local
transportation made available to
established patients (and, if needed, a
person to assist the patient) to obtain
medically necessary items and services.
We also seek comments on a second
format of transportation that would be
akin to a shuttle service. We are mindful
that certain types of entities may have
legitimate financial and patient care
interests in the provision of local
transportation to patients and that such
transportation could, depending on the
circumstances, benefit Federal health
care programs through reduced costs
and Federal beneficiaries through better
care, access, and convenience. In an
effort to foster these beneficial
arrangements without permitting
arrangements that negatively impact
beneficiaries or Federal health care
programs, the safe harbor would impose
a number of conditions on protected
free or discounted local transportation
services as set forth below.
(1) We propose to require that the free
or discounted local transportation
services be available only to established
patients (as described in greater detail
below) and be determined in a manner
unrelated to the past or anticipated
volume or value of Federal health care
program business. This requirement is
intended to reduce the risk that a health
care provider or supplier could use a
transportation program for the purpose
of increasing business by transporting
patients to its own premises or for the
purpose of inappropriately inducing
referrals from other providers or
suppliers by transporting patients to
theirs. We propose and solicit
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comments on a number of safeguards
and limitations related to this proposed
condition.
(a) We propose that the safe harbor
protect free or discounted local
transportation offered or provided by
any individual or entity, except as
provided below (for purposes of this
safe harbor, an ‘‘Eligible Entity’’),
subject to meeting all proposed
safeguards herein. The term ‘‘Eligible
Entity’’ in the proposed safe harbor
would not include individuals and
entities (or family members or others
acting on their behalf) that primarily
supply health care items (including, but
not limited to durable medical
equipment (DME) suppliers or
pharmaceutical companies) because we
believe that there may be additional risk
that these types of entities, which are
heavily dependent upon practitioner
prescriptions and referrals, would use
transportation arrangements to generate
business for themselves by steering
transported patients to those who order
their products. Moreover, these
suppliers and manufacturers do not
have the broader patient care
responsibilities that, for example,
hospitals, health systems, clinics, and
physicians have, and thus they would
seem to have less need to engage in free
or discounted local transportation
arrangements. We have similar concerns
about the laboratory industry even
though laboratories furnish services
rather than items. Thus, we propose to
exclude laboratories from the definition
of ‘‘Eligible Entity’’ and solicit
comments on that proposal.
For the same and other reasons, we
are considering and solicit comments on
whether certain other types of
providers, suppliers of services, or other
entities should be excluded, completely
or partially, from protection as an
Eligible Entity. In the context of
partially limiting protection as an
Eligible Entity, we are considering and
seek comments on whether certain types
of health care providers or suppliers of
services should not be protected when
they provide free or discounted local
transportation to other health care
providers or suppliers who refer to
them. For example, our oversight
experience suggests that overutilization
may be occurring in the home health
industry. We are concerned that
protecting the provision of free or
discounted local transportation by home
health care providers to physician
offices that are actual or potential
referral sources might result in both
steering (inducing the physician to refer
to that particular home health care
provider) and overutilization in the
form of unnecessary physician visits or
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unnecessary home health care
prescriptions. To address this concern,
we are considering excluding home
health care providers from safe harbor
protection when they furnish free or
discounted local transportation to their
referral sources (but not excluding them
from protection when they provide such
transportation to non-referral sources,
such as pharmacies). We also solicit
comments on whether home health
agencies should be excluded from the
definition of ‘‘Eligible Entity’’ entirely.
At this time, we propose that the safe
harbor criteria apply equally to all
Eligible Entities offering the eligible
forms of free or discounted local
transportation services. In addition to
considering whether to exclude certain
types of providers or suppliers of
services from protection as described
above, we are also considering and
solicit comments on whether there
should be additional safeguards
depending on the type of Eligible Entity
offering the transportation services and,
if so, what types of safeguards could be
included to protect beneficial free or
discounted local transportation
arrangements while at the same time
preventing abuses, such as
overutilization, improper patient
steering, or use of free or discounted
local transportation to generate referrals,
either referrals initiated by the
transported patient or referrals from
providers and others to whom the
patients are transported.
(b) We propose and solicit comments
on limiting safe harbor protection to free
or discounted local transportation
offered to established patients. Thus, for
example, once a patient has selected an
oncology practice and has attended an
appointment with a physician in the
group, the physician could offer
transportation assistance to the patient
who might have trouble reliably
attending appointments for
chemotherapy. However, safe harbor
protection would not be available to a
practice that offers or provides free or
discounted transportation to new
patients.
(c) We propose to allow free or
discounted local transportation services
to the premises of a health care provider
or supplier, subject to certain
limitations that we believe would
reduce the risk of using the
transportation services to increase
referrals. First, the safe harbor would
not protect free or discounted local
transportation that an Eligible Entity
makes available only to patients who
were referred to it by particular health
care providers or suppliers. Likewise,
the safe harbor would not protect an
offer of transportation that is contingent
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on a patient’s seeing particular
providers or suppliers who may be
referral sources for the Eligible Entity
offering the transportation. These
restrictions would not prohibit Eligible
Entities from setting limitations on the
furnishing of free or discounted local
transportation, but they would require
that the limitations be unrelated to the
volume or value of referrals. For
example, a hospital could place a limit
of 10 miles or a limit on the number of
trips on its offer to transport a patient
to another health care provider or
supplier for the purpose of obtaining
items or services necessary to avoid
hospital readmissions. It could not,
however, limit the offer of
transportation to patients who receive
these items or services from the
hospital’s referral sources. We are
considering and seek comments on any
additional safeguards that would be
required to limit the risk of fraud and
abuse associated with one health care
provider or supplier providing
transportation to the premises of
another, as well as on whether one
provider or supplier of services should
be permitted to provide free or
discounted local transportation to the
premises of others at all. For example,
if the safe harbor is to cover
transportation provided by one health
care provider to the premises of another,
should it be required that the patient be
an established patient of the provider or
supplier to which the patient would be
transported, as well as an established
patient of the Eligible Entity offering the
transportation? We also recognize that
health systems, health plans,
accountable care organizations, or other
integrated networks of providers and
suppliers might be Eligible Entities and
might seek to establish a free or
discounted local transportation program
only among providers and suppliers
within the system or network. We seek
comments on the impact on those
potential programs if we include, as
conditions of safe harbor protection, the
restrictions on offers of transportation
set forth in this section. We are
considering whether, and if so, how, the
safe harbor conditions should be
modified to account for differences that
may exist when these kinds of entities
provide free or discounted local
transportation. We are also considering
whether, for these kinds of entities, safe
harbor protection should apply only to
free or discounted local transportation
provided to destinations that are
participating or network providers or
suppliers; conversely, we are
considering whether such entities
should be permitted or required to
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provide free or discounted local
transportation to non-network or nonparticipating providers or suppliers and,
if so, under what conditions. Finally, if
we were to have different standards
applicable to entities that do not
directly furnish health care services, we
are interested in comments suggesting
safeguards to prevent abuses such as
overutilization, improper patient
steering, and increased costs.
(d) We also propose to require that the
offer or granting of free or discounted
local transportation services not be
based on the type of treatment a patient
might receive. Under the proposed safe
harbor, an Eligible Entity would be
permitted to restrict offers of free or
discounted local transportation to
patients whose conditions require
frequent or critical (e.g., follow-up
testing for a drug that has the potential
for serious side effects) appointments,
but who do not have reliable
transportation. In practice, this means
that a free or discounted local
transportation offer might be restricted
to patients with chronic conditions, or
even, in some circumstances, to patients
with a specific illness. However,
limiting offers of transportation to
patients who have been prescribed
expensive treatments that are lucrative
for the Eligible Entity offering the
transportation (or a referral source,
parent company, subsidiary, or other
affiliated entity of the Eligible Entity)
would not be protected. For example, an
oncology group that offered an
expensive radiation treatment in its
office could not restrict its offers of
transportation to patients who require
the lucrative radiation treatments. The
group could, however, offer
transportation to patients who require
frequent appointments to monitor their
condition, even if some of those patients
also would receive the radiation
treatment. We solicit comments on this
proposal.
(e) In addition, we are considering
and seek comments on whether to
require Eligible Entities to maintain
documented beneficiary eligibility
criteria, such as a requirement that the
patient show transportation need or
financial need or that the transportation
assistance would address risks
associated with failure to comply with
a treatment regimen. Offering
transportation to patients solely on the
basis of number of appointments,
without regard to transportation need,
raises the possibility that the offer might
be based upon the volume of Federal
health care program business and thus
would not be protected.
(f) Finally, we are considering and
solicit comments on whether Eligible
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59723
Entities should be limited for purposes
of safe harbor protection to providing
transportation for medical purposes or if
Eligible Entities should also be
protected under the safe harbor if they
provide free or discounted local
transportation for other purposes that
relate to the patient’s health care (e.g.,
to apply for government benefits, to
obtain counseling or other social
services, or to get to food banks or food
stores). We would not protect
transportation for purposes wholly
unrelated to health care, such as
transportation to entertainment or
sporting events. We note, however, that
the anti-kickback statute prohibits
offering or providing remuneration to
induce referrals for or receiving items or
services paid for by Federal health care
programs. The provision of
transportation for non-medical
purposes, even by a provider or supplier
of health care services, would not
necessarily violate the statute,
depending on the facts and
circumstances. For example, a hospital
could potentially sponsor shuttle
service between a housing complex and
a grocery store without running afoul of
the statute, if the service were available
to all residents of the complex
regardless of whether they were or
would become patients of the hospital.
We are considering and solicit
comments on whether the safe harbor
should separately protect transportation
supplied by an Eligible Entity, such as
a hospital, in the form of bus or van
service on regular routes that include
neighborhoods served by the hospital,
public transportation stops, and the
hospital campus or other locations
where referring physicians have offices.
If we were to protect this type of
transportation, protection would not
necessarily be limited to established
patients of an Eligible Entity. We
recognize that certain communities may
have a need for this type of service, but
we also recognize that such a service
presents opportunities for fraud and
abuse. Thus, we solicit comments not
simply on whether this type of service
would be useful but also on what
additional safeguards we could include
to reduce the risk that Eligible Entities
would use this service to bring in
patients for unnecessary services,
leading to overutilization or
compromised quality of care.
(2) We propose to limit the form of
transportation by excluding from safe
harbor protection air, luxury (e.g.,
limousine), and ambulance-level
transportation.
(3) We propose and solicit comments
on the following limitations, which
would be designed to exclude from
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protection transportation that is, in
reality, a means for providers and
suppliers to pay for recruitment of
patients. First, we propose to exclude
from safe harbor protection
transportation services that are publicly
advertised or marketed to patients or
others who are potential referral
sources. Second, we propose that the
safe harbor would not apply if Eligible
Entities were to pay drivers or others
involved in arranging the transportation
on a per-beneficiary transported basis,
rather than, for example, on an hourly
or mileage basis. Third, no safe harbor
protection would be available if
marketing of health care items and
services occurred during the course of
the transportation. For purposes of this
safe harbor condition, we would not
consider signage on the vehicle
designating the source of the
transportation (e.g., the name of the
hospital) to be ‘‘marketing.’’
(4) We propose to protect only local
transportation services provided: (a) To
the patient and, if needed, a family
member or other person to assist the
patient, to obtain medically necessary
items or services and (b) within the
local area of the health care provider or
supplier to which the patient would be
transported. We propose permitting the
free or discounted local transportation
to be extended to a family member, a
friend, or other person involved in the
patient’s care. We recognize that it may
be beneficial or necessary in some
circumstances for the patient to be
accompanied by another person, and we
do not view this extension as increasing
the risk of fraud and abuse. We do not
intend to require that the need for a
patient companion be documented, nor
do we intend that transportation of a
patient companion be required for the
proposed safe harbor to apply to
transportation of the patient.
Finally, we propose to limit the safe
harbor to local transportation. In the
interest of providing clear guidance, we
propose that if the distance that the
patient would be transported is no more
than 25 miles, then the transportation
would be deemed to be local. We solicit
comments on whether 25 miles is an
appropriate distance for this deeming
provision. We also solicit comments on
whether 25 miles should be a fixed
limitation rather than a distance
‘‘deemed’’ to comply with the safe
harbor.9
9 If 25 miles is a fixed limitation, nothing beyond
that distance would be ‘‘local’’ under the safe
harbor, unless the final rule includes alternate tests.
If 25 miles is deemed to be local, an Eligible Entity
could still comply with the ‘‘local’’ requirement
beyond 25 miles under appropriate facts and
circumstances.
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We recognize that a distance-based
test is not a one-size-fits-all solution.
Therefore, we are considering and seek
comments on other reasonable methods
for interpreting the term ‘‘local’’ either
alone or in combination with the 25mile deeming provision. For example,
we are considering and solicit
comments on:
• Whether to allow a more expansive
service area for patients who reside in
rural or underserved areas, and if so,
what the appropriate test should be and
if ‘‘rural’’ or ‘‘underserved’’ should be
defined;
Æ If we were to include definitions,
we solicit comments on: (1) Defining
‘‘underserved’’ as being located either in
a Health Professional Shortage Area or
a Medically Underserved Area; and (2)
using the definition of ‘‘rural’’ accepted
by the Office of Rural Health Policy (i.e.,
all counties outside a Metropolitan
Statistical Area (MSA), plus counties
within MSAs with Rural-Urban
Commuting Codes 4–10). We also solicit
comments on alternate definitions for
these terms;
Æ If we were to deem a greater
distance to be ‘‘local’’ in rural or
underserved areas, we solicit comments
on expanding the distance to 35 miles
or to the nearest facility capable of
providing medically necessary items
and services, whichever is greater;
• whether to permit free or
discounted local transportation to the
nearest facility capable of providing
medically necessary items and services,
even if the beneficiary resides farther
away than the proposed mileage limits
would otherwise allow;
• whether travel time might be more
appropriate than a distance-based
method;
• whether the general approach used
in the regulations governing exceptions
to the self-referral prohibition related to
compensation arrangements regarding
‘‘geographic area served by the
hospital,’’ which uses a calculation
based on the contiguous ZIP Codes from
which hospitals draw at least 75 percent
of their inpatients (see 42 CFR
411.357(e)(2)), would be useful; and
• whether a more general approach,
such as transportation offered to
patients within the primary service area
of the provider or supplier (or other
location) to which the patient would be
transported, would be appropriate.
We solicit comments on all of these
possible approaches, and we will
consider alternative suggestions as well.
(5) We propose requiring the Eligible
Entity that makes the transportation
available to bear the costs of the free or
discounted local transportation services
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and not shift the burden of these costs
onto Medicare, a State health care
program, other payers, or individuals.
Moreover, safe harbor protection would
not be available if the Eligible Entity
providing the transportation and the
destination provider or supplier had any
referral agreement tied to the
transportation. For example, if an
ambulance supplier had an agreement
with a hospital to provide certain free
transports to hospital outpatients (e.g.,
via van service) in exchange for
receiving the hospital’s transports that
are payable by Medicare Part B, the free
transportation would not be protected.
B. Civil Monetary Penalty Authorities
This proposed rule would amend 42
CFR Part 1003 in two ways. First, we
propose to amend the definition of
‘‘remuneration’’ related to the
beneficiary inducements CMP to: (a)
Add a self-implementing exception that
was enacted in BBA of 1997 but was
never codified in our regulations; and
(b) codify amendments that were
enacted in ACA. Second, we propose to
codify in our regulations the
Gainsharing CMP by interpreting terms
used in that statute and adding a
definition of ‘‘hospital’’ to the
regulations.
1. Beneficiary Inducements CMP
This proposed rule would add
exceptions to the regulations at Part
1003 addressing the civil monetary
penalties prohibition against offering
inducements to Medicare or Medicaid
beneficiaries that the offeror knows or
should know are likely to influence the
selection of particular providers,
practitioners or suppliers.10 As we
explained in footnote 2 above, one
exception to the definition of
‘‘remuneration’’ for purposes of the
beneficiary inducements CMP
incorporates exceptions to the antikickback statute and the safe harbor
regulations. However, no parallel
exception exists in the anti-kickback
statute. Thus, the exceptions in section
1128A(i)(6) of the Act apply only to the
definition of ‘‘remuneration’’ applicable
to section 1128A.
Section 4523 of the BBA of 1997
added section 1833(t)(5)(B) of the Act,
which required the Secretary to
establish a procedure to permit
hospitals to elect to reduce copayment
amounts for some or all covered
hospital outpatient department (OPD)
services (as defined in section
1833(t)(1)(B)) to no less than 20 percent
of the Medicare OPD fee schedule
10 For additional background on this provision,
see 65 FR 24400 (Apr. 26, 2000).
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amount. The Secretary established the
required procedures at 42 CFR 419.42.
Section 4523 of the BBA of 1997 also
added subsection (D) to the definition of
‘‘remuneration’’ at section 1128A(i)(6) of
the Act. That subsection, which was
subsequently redesignated subsection
(E), excluded from the definition of
‘‘remuneration’’ ‘‘a reduction in the
copayment amount for covered OPD
services under section 1833(t)(5)(B) [of
the Act].’’ Id. Subsequent to the BBA of
1997, sections 201(a) and 202(a) of the
Medicare, Medicaid, and SCHIP
Balanced Budget Refinement Act of
1999 (106 Pub. L. 113) redesignated
subsection 1833(t)(5) as section
1833(t)(8). A corresponding change to
the reference at 1128A(i)(6)(E) was not
made. We propose to codify the
exception to the definition of
‘‘remuneration’’ at 1128A(i)(6)(E) in our
regulations at proposed 42 CFR
1003.110 (current § 1003.101). We
propose to adopt language identical to
the statutory language, except that we
propose to change the reference from
1883(t)(5)(B) to 1883(t)(8)(B) to reflect
the redesignation of the originally
referenced subsection. We believe that
our proposed change is consistent with
congressional intent and merely
addresses an inadvertent oversight. We
solicit comments on this proposal.
Section 6402(d)(2)(B) of ACA amends
the statutory definition of
‘‘remuneration’’ at section 1128A(i)(6) of
the Act by adding four new
subparagraphs, (F)–(I), protecting
certain charitable and other programs.
We propose to amend the definition of
‘‘remuneration’’ in the regulations to
include the new statutory exceptions.
We believe these exceptions are
intended to protect certain arrangements
that offer beneficiaries incentives to
engage in their wellness or treatment
regimens or that improve or increase
beneficiary access to care, including
better care coordination. However, in
structuring the proposals, we are also
mindful of the significant potential for
abusive arrangements that offer
vulnerable beneficiaries (or, in some
cases, cooperating beneficiaries)
remuneration, whether in cash or in
kind, to induce them to obtain items or
services billable to Medicare or
Medicaid that may be unnecessary, too
expensive, or of poor quality. The
proposals set forth below aim to ensure
that additional protections offered for
arrangements that benefit patient care
do not lead to such abuses.
Promotes Access/Low Risk of Harm
The first new exception to the
definition of ‘‘remuneration,’’ added at
section 1128A(i)(6)(F) of the Act,
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protects ‘‘any other remuneration which
promotes access to care and poses a low
risk of harm to patients and Federal
health care programs (as defined in
section 1128B(f) and designated by the
Secretary under regulations).’’
For purposes of this exception, we
propose that the phrase ‘‘promotes
access to care’’ mean that the
remuneration provided improves a
particular beneficiary’s ability to obtain
medically necessary health care items
and services. We solicit comments on
whether this phrase should be
interpreted more broadly, particularly in
light of the movement towards
coordinated or integrated care
arrangements that depend, in part, on
patient engagement. For example, we
are considering whether to interpret
‘‘promotes access to care’’ to include
encouraging patients to access care,
supporting or helping patients to access
care, or making access to care more
convenient for patients than it would
otherwise be. We request that any such
comments include specific examples of
remuneration that would promote
access to care under a broader definition
that would not be included within the
proposed interpretation above. When
providing examples, we request that
commenters bear in mind that not all
forms of remuneration provided to
beneficiaries would be prohibited by the
beneficiary inducements CMP. The
beneficiary inducements CMP applies
only to remuneration that the donor
‘‘knows or should know is likely to
influence [the recipient] to order or
receive from a particular provider,
practitioner, or supplier any item or
service for which payment may be
made’’ by Medicare or Medicaid. Thus,
remuneration that is not likely to
influence a beneficiary to order or
receive federally reimbursable items or
services from a particular provider,
practitioner, or supplier need not meet
the conditions of this or any other
exception.
We are also considering, and
soliciting comments on, whether the test
for the exception should be that the
remuneration would promote access to
care for a particular beneficiary or
whether the exception should also
apply to remuneration that promotes
access to care for a defined beneficiary
population generally, such as, by way of
example, beneficiaries in a designated
care network or beneficiaries being
treated under a designated care
protocol. Finally, we are considering,
and soliciting comment on, whether we
should more broadly interpret ‘‘access
to care’’ to include care that is nonclinical but reasonably related to the
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patient’s medical care, such as social
services.
We propose to interpret the phrase
‘‘low risk of harm to Medicare and
Medicaid beneficiaries and the
Medicare and Medicaid programs’’ as
meaning that the remuneration: (1) Is
unlikely to interfere with, or skew,
clinical decision-making; (2) is unlikely
to increase costs to Federal health care
programs or beneficiaries through
overutilization or inappropriate
utilization; and (3) does not raise
patient-safety or quality-of-care
concerns.
While some forms of remuneration
covered by the prohibition at section
1128A(a)(5) of the Act may promote
access to care and some forms may pose
a low risk of harm to Medicare and
Medicaid beneficiaries and the
programs, the amendment to the statute
applies only to forms of otherwise
prohibited remuneration that meet both
of these standards. By way of example,
through our advisory opinion process,
we have examined and approved
arrangements that meet both
requirements. In these arrangements,
certain hospitals provide lodging
assistance to patients and their families
when the assistance was necessary for
the patient to obtain appropriate care.
Because of the specialized nature of
these hospitals, the lodging programs
were unlikely to steer patients to those
particular hospitals, and the costs were
not passed on to Federal programs. Yet,
the programs enabled patients to get
treatment that they might not otherwise
have been able to access because of
logistical hurdles. See OIG Advisory
Opinion Nos. 11–01 and 11–16.
Similarly, we believe that giving items
that are necessary for patients to record
and report health data, such as blood
pressure cuffs or scales, to beneficiaries
who could benefit from close
monitoring of their blood pressure or
weight, promotes access to care, because
the recording and reporting of health
data increase their ability to obtain
medically necessary care and pose a low
risk of harm to patients and Federal
programs as long as receipt of the items
is not conditioned on the patient
obtaining other items or services from a
particular provider or supplier.
However, not every program that
benefits patients would meet the terms
of this exception. We continue to
believe that offering valuable gifts to
beneficiaries in connection with direct
or indirect marketing activities is not
low risk to beneficiaries or to the
Medicare and Medicaid programs. In
addition, we are concerned that rewards
offered by providers or suppliers to
patients purportedly for compliance
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with a treatment regimen pose a risk of
abuse, in cases when the offerors know
or should know that the rewards are
likely to influence the recipients to
order or receive from a particular source
items or services paid for by Medicare
or Medicaid. For example, patients
might seek or agree to seek unnecessary
or poor quality care to obtain the
rewards, or providers and suppliers
might order or seek orders for additional
items or services to recoup the costs of
giving the rewards. In either case, such
rewards would not be low risk for
patients and/or Federal health care
programs.
While we are concerned about the
significant potential for abuse when
patients are offered rewards to induce
them to receive items or services, we are
also aware that, in some circumstances,
patients might be offered incentives to
encourage them to engage in
arrangements that lower health care
costs (without compromising quality) or
that promote their own wellness and
health care, for example, by
participating fully in appropriate
prescribed treatment, achieving
appropriate treatment milestones, or
following up with medically necessary
appointments. We seek comments on
whether otherwise prohibited incentives
for compliance with treatment regimens
should be permitted under this
exception and if so, what limitations or
safeguards should be required. For
example, should the incentives be
subject to specific dollar value limits?
Should providers or suppliers offering
the incentives be required to document
the milestones reached to earn the
incentives? Should the form of the
incentive be required to bear a
reasonable connection to the medical
care? Are there quality or performance
metrics or monitoring mechanisms that,
if required for safe harbor compliance,
would help ensure that protected
patient incentives are not used to
facilitate abusive arrangements that
increase costs or compromise quality?
Are there different considerations if the
offeror of the incentive is at risk, in
whole or in part (or directly or
indirectly) for the treatment that the
incentive is intended to encourage (e.g.,
if the offeror is a risk-bearing
accountable care organization, medical
home, or health plan; a hospital subject
to readmissions penalties; or a provider
reimbursed under a bundled payment
arrangement that includes some or all of
the incentivized treatment)?
We recognize that the Department is
undertaking a number of initiatives and
demonstration programs with the goal of
encouraging better care and better
health at lower costs through innovative
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means, some of which could involve
providing incentives to beneficiaries.
These programs include, for example, a
variety of permanent and demonstration
programs testing accountable care
organizations, medical homes, bundled
payments, coordinated care programs,
and other initiatives to improve the
quality of care and reduce costs. Some
participants in particular CMS models,
such as the Bundled Payment for Care
Initiative, may have waivers of the CMP
for certain arrangements undertaken as
part of the applicable CMS model.11
With respect to CMS programs or
models to which a waiver does not
apply, we are considering whether to
make a special provision in this rule for
incentives offered by participants to
beneficiaries covered by those programs.
Many of these programs have safeguards
built into their structures. For example,
CMS reviews and monitors these
programs, beginning with an application
process, continuing through the
development and implementation
phases, and including a final assessment
of the overall impact of the program on
cost and quality of care. Because
incentives offered to beneficiaries to
foster patient engagement outside the
auspices of such a CMS program are not
subject to this oversight, we would not
necessarily consider that remuneration
(if otherwise prohibited by the
beneficiary inducements CMP) to be low
risk, unless it met the same safeguards
that we finalize in connection with this
proposed rule.
We are also soliciting comments on
other types of remuneration to
beneficiaries not mentioned in this
preamble that both promote access to
care and pose a low risk of harm to
Medicare and Medicaid beneficiaries
and the Medicare and Medicaid
programs, to inform our development of
regulatory text for this exception. We
are not providing regulatory text at this
time, but we solicit proposals for
language, including specific examples of
the types of remuneration to
beneficiaries, that would implement the
principles described above.
Retailer Rewards Programs
Section 6402(d)(2)(B) of ACA adds the
following exception as new section
1128A(i)(6)(G) of the Act:
The offer or transfer of items or services for
free or less than fair market value by a
person, if—
(i) the items or services consist of coupons,
rebates, or other rewards from a retailer;
11 Nothing in this proposed rule would change
the application of existing waivers. It is possible
that a final exception, as proposed here, might offer
additional protection for participants in programs
that have such a waiver.
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(ii) the items or services are offered or
transferred on equal terms available to the
general public, regardless of health insurance
status; and
(iii) the offer or transfer of the items or
services is not tied to the provision of other
items or services reimbursed in whole or in
part by the program under title XVIII or a
State health care program (as defined in
section 1128(h)).
This exception concerns retailer
rewards programs. We are aware that
this genre of program has proliferated in
recent years at grocery stores, drug
stores, ‘‘big-box,’’ and other retailers.
Although these retailer rewards
programs vary in design, in general most
attempt to incentivize and reward
customer loyalty by providing benefits
to shoppers. Many retailers offering
such programs have pharmacies that sell
items or services reimbursable by
Federal health care programs.
OIG has interpreted the prohibition
on offering gifts and other inducements
to beneficiaries as permitting Medicare
or Medicaid providers generally to offer
beneficiaries inexpensive gifts or
services (other than cash or cash
equivalents) without violating the
statute. For enforcement purposes, we
have considered inexpensive gifts or
services to be those that have a retail
value of no more than $10 individually
and no more than $50 in the aggregate
annually per patient.12 Notwithstanding
this interpretation, we understand that
many retailer reward programs have
included a blanket exclusion of Federal
health care program beneficiaries.
Against this backdrop, we believe this
new exception should increase retailers’
willingness to include Federal health
care program beneficiaries in their
reward programs in appropriate
circumstances.
Section 6402(d)(2)(B) of ACA
excludes from the definition of
‘‘remuneration’’ rewards pursuant to a
retailer rewards program that meet three
criteria. The first criterion provides that
the free or less-than-fair-market-value
items or services must ‘‘consist of
coupons, rebates, or other rewards from
a retailer.’’ We propose to interpret
these terms as follows. We interpret a
‘‘coupon’’ as something authorizing a
discount on merchandise or services.
For instance, if Alpha Store’s rewards
program mails its customers a flyer
offering 20 percent off the purchase
price of any item in the store, the flyer
would be considered a coupon. Another
example of a coupon would be a ‘‘buy
one get one free’’ reward. We propose to
12 See Special Advisory Bulletin: Offering Gifts
and Other Inducements to Beneficiaries, available at
https://oig.hhs.gov/fraud/docs/alertsandbulletins/
SABGiftsandInducements.pdf.
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interpret ‘‘rebate’’ as a return on part of
a payment. For example, if Beta Store’s
retailer reward program consisted of
returning to customers a store credit
equal to 1 percent of the total money the
customer spent out-of-pocket at the
retailer during the previous calendar
year, it would constitute a rebate. In no
event, however, could a retailer ‘‘rebate’’
an amount that exceeds what the
customer spent at the store. We propose
to interpret ‘‘other rewards’’ primarily
as describing free items or services, such
as store merchandise, gasoline, frequent
flyer miles, etc. Finally, we interpret
‘‘retailer’’ as having its usual meaning,
i.e., an entity that sells items directly to
consumers. We note, however, that
individuals or entities that primarily
provide services (e.g., hospitals or
physicians) would not be considered
‘‘retailers.’’ We are considering and
solicit comments on whether entities
that primarily sell items that require a
prescription (e.g., medical equipment
stores) should be considered ‘‘retailers.’’
The second criterion requires that the
items or services be offered or
transferred on equal terms to the public,
regardless of health insurance status.
We propose to interpret this
requirement consistent with OIG’s
longstanding concern that providers and
suppliers of items or services
reimbursable in whole or in part by
Federal health care programs not
discriminate against (‘‘lemon drop’’)—
or, conversely, ‘‘cherry pick’’—certain
patients on the basis of health insurance
status. For example, we do not believe
that a retailer that targets its rewards
program to Medicare beneficiaries only
would meet this criterion. On the other
hand, if a retailer mailed a coupon for
$10 off the next purchase of any item in
its store, including prescriptions, to
every resident in the surrounding ZIP
Code, such a promotion likely would be
in compliance with this provision
because the coupon would be offered on
equal terms to everyone in the ZIP Code,
without regard to health insurance
status.
The third criterion requires that the
offer or transfer of the items or services
not be tied to the provision of other
items or services reimbursed in whole
or in part by Medicare or an applicable
State health care program. We believe
that the objective of this criterion is to
attenuate any connection between
federally payable items and services and
a loyalty program’s rewards; this
attenuation should be present both in
the manner in which a reward is earned
and in the manner in which the reward
is redeemed, as explained further below.
We do not interpret the prohibition on
tying the free or below-market items and
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services to federally reimbursable
services as requiring a complete
severance of the offer from the medical
care of the individual. At the front end
of a transaction (‘‘earning’’ the reward),
the reward should not be conditioned
on the purchase of goods or services
reimbursed in whole or in part by a
Federal health care program and should
not treat federally reimbursable items
and services in a manner that is
different from that in which nonreimbursable items and services are
treated. For instance, a drugstore
program that offered a $20 coupon to
customers, including Medicare
beneficiaries, who transferred their
prescriptions to the drugstore would not
meet this criterion because the $20
coupon would be tied to the drugstore’s
getting the recipients’ Medicare Part D
prescription drug business. On the other
hand, a program that awarded a $20
coupon once a customer spent $1,000
out-of-pocket in the store—even if a
portion of that $1,000 included
copayments for prescription drugs—
would likely meet the criterion. We also
believe that this attenuation must be
present on the ‘‘redeeming’’ end of the
transaction and therefore interpret it to
exclude from protection rewards
programs in which the rewards
themselves are items or services
reimbursed in whole or in part by a
Federal health care program. Thus, if
Epsilon Store allowed its customers to
redeem reward points only for costsharing (i.e., the customer’s out-ofpocket costs) on DME, prescription
drugs, or other federally payable items
or services, that program would not
meet this criterion. On the other hand,
if the $10 coupon referenced in the first
example could be redeemed on anything
purchased in the store, including the
customer’s out-of-pocket costs for
federally reimbursable items, the
coupon could meet the terms of the
exception.
Financial-Need-Based Exception
A third new statutory provision,
added at 1128A(i)(6)(H) of the Act,
excepts from the definition of
‘‘remuneration’’ the offer or transfer of
items or services for free or at less than
fair market value after a determination
that the recipient is in financial need
and meets certain other criteria.
We begin our consideration of this
new provision by noting that it concerns
‘‘the offer or transfer of items or
services.’’ The term ‘‘items or services’’
does not include cash or instruments
convertible to cash. This interpretation
is consistent with our interpretation of
‘‘permissible incentives for preventive
care’’ under section 1128A(i)(6)(D), as
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explained in the preamble to that final
rule (‘‘we are excluding from the scope
of permissible exceptions cash and
instruments convertible to cash’’ (65 FR
24400, 24409 (Apr. 26, 2000)). Other
proposed limits on what may be
transferred are discussed in the
paragraphs below.
The statute provides that protected
items or services may not be offered as
part of any advertisement or solicitation.
We are including this requirement in
our proposed regulation.
The second statutory criterion is that
‘‘the items or services are not tied to the
provision of other services reimbursed
in whole or in part by the program
under title XVIII or a State health care
program. . . .’’ To interpret this
criterion in a meaningful way, it is
necessary to consider it together with
the next requirement, which is that
there must be a reasonable connection
between the items or services and the
medical care of the individual. Each
requirement is discussed in more detail
below.
To be protected under the statute, the
item or service being offered or
transferred must not be tied to the
provision of other reimbursed services.
Consistent with our interpretation of the
same criterion described in connection
with the exception for retailer rewards
programs described above, we do not
interpret the prohibition on tying the
free or below-market items and services
to services reimbursable by Medicare or
Medicaid as requiring a complete
severance of the offer from the medical
care of the individual. However, a
provider’s conditioning the offer or
transfer of items or services on the
patient’s use of other services from the
provider that would be reimbursed by
Medicare or Medicaid would violate
this requirement. For example, we
interpret this criterion to exclude from
protection offers by providers of lodging
or transportation to receive a particular
service from the provider.13 We solicit
comments on this interpretation.
The third statutory requirement is that
there ‘‘is a reasonable connection
between the items or services and the
medical care of the individual.’’ We
must interpret this requirement in the
context of this particular exception.
This exception is designed to help
financially needy individuals access
items or services related to their medical
13 As explained above, we have approved lodging
and transportation assistance programs through our
advisory opinion process. However, we found that
the programs were consistent with the exception to
the definition of ‘‘remuneration’’ for programs that
promote access to care and pose a low risk of harm
to patients and Federal health care program
beneficiaries.
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care; unlike the preventive care
exception referenced above, this
exception is not designed to induce the
patient to seek additional care.
For purposes of this requirement, we
interpret ‘‘medical care’’ to refer to the
treatment and management of illness or
injury and the preservation of health
through services offered by the medical,
dental, pharmacy, nursing, and allied
health professions. Consistent with the
statutory language, our proposed
regulation would require a ‘‘reasonable
connection’’ between the remuneration
and the patient’s medical care. Whether
a ‘‘reasonable connection’’ exists
depends on a situation’s specific facts
and circumstances. In particular, this
requirement warrants a dual
consideration: Whether a reasonable
connection exists from a medical
perspective and whether a reasonable
connection exists from a financial
perspective. A reasonable connection
exists from a medical perspective when
the items or services would benefit or
advance identifiable medical care or
treatment that the individual patient is
receiving. From a financial perspective,
remuneration disproportionately large
compared with the medical benefits
conferred on the individual patient
would not have a reasonable connection
to the patient’s medical care. Such
remuneration gives rise to an inference
that at least part of the transfer is being
provided to induce beneficiaries to
obtain additional services, and such
remuneration would not be covered by
the Financial-Need-Based Exception.
Examples of transfers of items or
services that, in context, might qualify
as reasonably connected to medical care
include:
• Distribution of protective helmets
and safety gear to hemophiliac children;
• distribution of pagers to alert
patients with chronic medical
conditions to take their drugs;
• provision of free blood pressure
checks to hypertensive patients;
• distribution of free nutritional
supplements to malnourished patients
with end-stage renal disease (ESRD);
and
• provision of air conditioners to
asthmatic patients.
However, in another context, these
same items and services would not
likely qualify as reasonably connected
to an individual patient’s medical care.
Most obviously, these would include
transfers of items or services to an
individual for whom they were not
medically indicated. We are considering
and seek comments, however, on the
boundaries of the concept of ‘‘medically
indicated.’’ For example, should a
hospital be permitted to provide free
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bicycle helmets or other child safety
devices to financially needy families
when children are treated for injuries in
the emergency department? We use this
example, which arguably is not related
to ‘‘care,’’ in order to inform comments
on the limits of the ‘‘reasonable
connection to care’’ requirement.
From a financial perspective, transfers
of items or services of
disproportionately large value compared
with their medical benefit for the
individual patient would not qualify.
For example, transfer to a diabetic
patient of a smartphone preloaded with
an ‘‘app’’ relating to management of
blood sugar levels would not likely
qualify, while an offer to the diabetic
patient of only a complimentary
download of the app onto his or her
own smartphone might.
We are considering whether we can
(and, if so, whether we should) identify
specific conditions under which
remuneration would be deemed to be
‘‘reasonably connected’’ to the patient’s
medical care, and we solicit suggestions
for possible conditions. For example,
one condition we are considering is
whether the patient’s physician or other
health care professional has concluded
that the items or services would benefit
the individual patient’s treatment.
Another possible condition is whether,
absent the transfer of needed health care
items or services, the patient would
otherwise be expected to lack access to
them for reasons including lack of
payment resources; lack of appropriate
health care facilities in the patient’s
community or the surrounding areas;
and unique physical, behavioral, or
mental health issues that might interfere
with the patient’s ability to otherwise
obtain access. Such circumstances in a
patient’s case would support the
argument for a reasonable connection.
We solicit comments about what
additional or alternative factors should
be considered, if any, in the
determination of a reasonable
connection between items or services
offered or transferred and the medical
care of the individual.
The fourth and final statutory
requirement is that the items or services
may be provided only ‘‘after
determining in good faith that the
individual is in financial need.’’ We
propose to interpret this provision as
requiring an individualized assessment
of the patient’s financial need on a caseby-case basis. Moreover, the assessment
must be conducted in good faith. We
believe, among other things, that a good
faith assessment requires the use of a
reasonable set of income guidelines,
uniformly applied. This reasonable set
of financial need guidelines should be
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based on objective criteria and be
appropriate for the applicable locality.
Under our proposal, ‘‘financial need’’
would not be limited to ‘‘indigence,’’
but could include any reasonable
measure of financial hardship. What
constitutes a good faith determination of
‘‘financial need’’ may vary depending
on the individual patient’s
circumstances; the individual or entity
offering the items or services should
have flexibility to consider relevant
variables. We are considering whether
we have authority to require
documentation of the financial need
assessment as a condition of the
exception. Regardless, it would be
prudent for those seeking protection
under the proposed exception to
maintain accurate and contemporaneous
documentation of the need assessment
and the criteria applied.
Waivers of Cost-Sharing for the First Fill
of a Generic Drug
The fourth new provision added at
section 1128A(i)(6)(I) of the Act excepts
from the definition of ‘‘remuneration’’
waivers by a PDP sponsor of a Part D
plan or MA organization offering MA–
PD plans of any copayment that would
be otherwise owed by their enrollees for
the first fill of a covered Part D drug that
is a generic drug. Section 6402(d)(2)(B)
of ACA does not define the term
‘‘generic drug,’’ so we propose to rely on
the definition in the Part D regulations
at 42 CFR 423.4.
The type of waiver described in the
statute is designed to minimize drug
costs by encouraging the use of lower
cost generic drugs. To implement this
waiver, we propose interpreting this
statutory provision consistently with
current CMS guidance. Thus, sponsors
desiring to offer these waivers to their
enrollees would be required to disclose
this incentive program in their benefit
plan package submissions to CMS. We
propose to include this requirement
both to ensure consistency with current
CMS practice and to ensure
transparency to beneficiaries when they
select Part D or MA plans. We propose
to make this exception effective for
coverage years beginning after
publication of the final rule. We note,
however, that CMS already permits
these waivers as part of Part D and MA
plan benefit designs. Although this
proposed regulation will not be effective
until a future date, we will not exercise
our enforcement authority against plans
complying with CMS requirements for
these waivers in the interim.
2. Gainsharing
The Gainsharing CMP is a selfimplementing law that prohibits
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hospitals and critical access hospitals
from knowingly paying a physician to
induce the physician to reduce or limit
services provided to Medicare or
Medicaid beneficiaries who are under
the physician’s direct care. We proposed
regulations in 1994 to interpret the
Gainsharing CMP (59 FR 61571 (Dec. 1,
1994)), but the proposed rule was not
finalized. In July 1999, we published a
Special Advisory Bulletin titled
‘‘Gainsharing Arrangements and CMPs
for Hospital Payments to Physicians to
Reduce or Limit Services to
Beneficiaries’’ (the Gainsharing SAB),
available at: https://oig.hhs.gov/fraud/
docs/alertsandbulletins/gainsh.htm. In
the Gainsharing SAB, we explained that
the Gainsharing CMP is broad and
prohibits any hospital incentive plan
that involves payments to physicians to
encourage reductions or limitations in
items or services provided to patients
under the physicians’ clinical care. We
observed that the statute does not limit
this prohibition to reductions or
limitations of medically necessary items
or services.
We have previously observed that not
all changes in practice necessarily
constitute a reduction of services.
Health care payment and delivery
systems are changing, with greater
emphasis on accountability for
providing high quality care at lower
costs. We propose to codify the
Gainsharing CMP in our regulations and
interpret certain provisions in a manner
that reflects today’s health care
landscape.
OIG has recognized that gainsharing
can be beneficial. In fact, we have
approved 16 gainsharing arrangements
through our advisory opinion process.14
We found that the particular facts
presented to us in those arrangements
presented few risks relative to those of
other gainsharing arrangements. The
gainsharing programs in the advisory
opinions set out specific actions to be
taken and tied remuneration to the
actual cost savings attributable to the
arrangements. They included specific
safeguards against patient and program
abuse.
Citing to many of these advisory
opinions, the Medicare Payment
Advisory Commission (MedPAC)
recommended that Congress authorize
the Secretary to allow gainsharing
arrangements and to regulate those
arrangements to protect the quality of
care and minimize financial incentives
that could influence physician referrals.
See MedPAC, Report to the Congress:
14 OIG Advisory Opinion Nos.: 00–02, 01–01, 05–
01, 05–02, 05–03, 05–04, 05–05, 05–06, 06–22, 07–
21, 07–22, 08–09, 08–15, 08–21, 09–06, 12–22.
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Physician-Owned Specialty Hospitals
(March 2005) (MedPAC Report). The
MedPAC Report provided examples of
safeguards included in OIG advisory
opinions and posited that gainsharing
programs could lead to program savings
over time. See id. at p. 46.
Later that year, the Chief Counsel to
the Inspector General testified to the
House Committee on Ways and Means
about gainsharing. The testimony
highlighted three types of safeguards
that the OIG looked for when evaluating
the risks posed by a gainsharing
program: Measures that promote
accountability, adequate quality
controls, and controls on payments that
may change referral patterns. See
Testimony of Lewis Morris, Chief
Counsel to the Inspector General, House
Committee on Ways and Means,
Subcommittee on Health (October 7,
2005), available at https://oig.hhs.gov/
testimony/docs/2005/Gainsharing10-0705.pdf. Although the testimony focused
largely on specific risks in gainsharing
programs, and safeguards to counteract
those risks, the testimony also explained
that if properly structured, ‘‘gainsharing
arrangements may offer opportunities
for hospitals to reduce costs without
causing inappropriate reductions in
medical services or rewarding referrals
of Federal health care program
patients.’’ Id. at p. 1. In fact, OIG would
be unlikely to bring a case against a
hospital or physician for a gainsharing
arrangement that included patient and
program safeguards such as those
identified in our advisory opinions.15
In addition, since 2005, Congress has
authorized, and the Secretary has
approved, a number of projects
involving gainsharing. For example, the
Deficit Reduction Act of 2005 16
required the Secretary to establish a
gainsharing program to test and evaluate
arrangements between hospitals and
physicians designed to govern
utilization of certain inpatient services
to improve the quality and efficiency of
care. Section 3022 of ACA required the
Secretary to establish a Medicare shared
savings program (Shared Savings
program) and allowed the Secretary to
waive such requirements of sections
1128A and 1128B and Title XVIII of the
Act as may be necessary to carry out the
15 OIG has never pursued any gainsharing CMP
case. OIG always has been, and remains, open to
pursuing a gainsharing CMP case under appropriate
facts. Prior to initiating any such case, we would
consider the factors set out in the advisory opinions
and considerations discussed in this preamble.
Pending further notice from OIG, gainsharing
arrangements are not an enforcement priority for
OIG unless the arrangement lacks sufficient patient
and program safeguards.
16 Deficit Reduction Act of 2005, Public Law 109–
171, § 5007, 120 Stat. 4, 34–36 (2006).
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provisions of section 3022. In the
Interim Final Rule implementing the
Shared Savings program waivers, the
Secretary waived the Gainsharing CMP
with respect to certain aspects of the
Shared Savings program, subject to
applicable conditions. See 76 FR 67992
(Nov. 2, 2011).
Both government and private insurers
have increased efforts to lower costs and
improve the quality of care. Better ways
of measuring quality and outcomes exist
now than in the past. The growth of
health information technology,
developments in data analytics and
quality metrics, and broader use of
evidence-based medicine all facilitate
such measurements and accountability
for performance. For example, the
Shared Savings program, as enacted,
promotes an evidence-based medicine
approach for accountable care
organizations participating in the
Shared Savings program (ACOs): ‘‘[t]he
ACO shall define processes to promote
evidence-based medicine and patient
engagement, report on quality and cost
measures, and coordinate care, such as
through the use of telehealth, remote
patient monitoring, and other such
enabling technologies.’’ Section
1899(b)(2)(G) of the Act.
Notwithstanding these and similar
developments, the Gainsharing CMP has
not been amended by Congress. It
prohibits a hospital from knowingly
making a payment, directly or
indirectly, to a physician as an
inducement to reduce or limit services
provided to Medicare or Medicaid
beneficiaries who are under the direct
care of the physician. The statute does
not prohibit only payments to reduce
medically necessary services; it
prohibits payments to reduce or limit
‘‘services.’’ Without a change in the
statute, we continue to believe that we
cannot read a ‘‘medically necessary’’
element into the prohibition. However,
given the changes in the practice of
medicine over the years, including
collaborative efforts among providers
and practitioners and the rise of widely
accepted clinical metrics, we are
considering a narrower interpretation of
the term ‘‘reduce or limit services’’ than
we have previously held.
Since issuing the Gainsharing SAB,
we have had the opportunity to examine
a number of different gainsharing
arrangements through our advisory
opinion process. In each favorable
opinion we issued, we found that the
cost-saving measures proposed by the
hospitals implicated the statute. For
example, in OIG Advisory Opinion No.
05–01, we stated: ‘‘the Proposed
Arrangement constitutes an inducement
to reduce or limit the current medical
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practice at the Hospital.’’ We went on to
state that ‘‘[w]e recognize that the
current medical practice may involve
care that exceeds the requirements of
medical necessity. However, whether
the current medical practice reflects
necessity or prudence is irrelevant for
purposes of the CMP.’’ OIG Advisory
Opinion No. 05–01 (issued Jan. 28,
2005, at pp. 7–8).17 This language
implies that any change to current
medical practice that a hospital might
initiate is potentially a reduction in care
that could trigger CMP liability.
However, as hospitals move towards
using objective quality metrics, we
recognize that a change in practice does
not necessarily constitute a limitation or
reduction of services, but may in fact
constitute an improvement in patient
care or a reduction in cost without
reducing patient care or diminishing its
quality.
The regulatory text we are proposing
largely tracks the statute and is similar
to the text proposed in 1994. Besides
codifying the gainsharing prohibition
itself, we propose to add a definition of
‘‘hospital’’ to proposed section 42 CFR
1003.110 (current § 1003.101). This
definition would refer to the definitions
of ‘‘hospital’’ and ‘‘critical access
hospital’’ in the Act. In addition,
however, we are considering and solicit
comments on whether we should
include a definition of the term ‘‘reduce
or limit services’’ to address the
considerations we express above. If so,
we solicit specific proposals and
safeguards that we should include in
this definition to ensure that the goal of
the statute is met: To prevent hospitals
from paying physicians to discharge
patients too soon or take other action
that inappropriately limits a
beneficiary’s care. We are not proposing
text of a definition at this time. We
specifically solicit comments on the
following areas of concern, but we
welcome any other comments relating to
the topic:
• We have interpreted the prohibition
on payments to reduce or limit services
as including payments to limit items
used in providing services, which is
consistent with the definition of
‘‘services’’ found at 42 CFR 400.202. Is
17 Under section 1862 of the Act, no payment may
be made under Part A or Part B for any expenses
incurred for items or services that (with certain
exceptions) are not reasonable and necessary for the
diagnosis or treatment of illness or injury or to
improve the functioning of a malformed body
member. Under the Part A prospective payment
system (PPS) for hospital inpatient stays, payments
are made for hospital stays that are reasonable and
necessary; however, additional payment is not
made if a patient receives individual items or
services in excess of, or more expensive than, those
factored into the PPS payment for covered care.
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this interpretation appropriate or
necessary in the context of the
Gainsharing CMP?
• Should a hospital’s decision to
standardize certain items (e.g., surgical
instruments, medical devices, or drugs)
be deemed to constitute reducing or
limiting care? Would the answer be the
same if the physicians were simply
encouraged to choose from the
standardized items, but other items
remained available for use when
deemed appropriate for any particular
patient?
• Should a hospital’s decision to rely
on protocols based on objective quality
metrics for certain procedures ever be
deemed to constitute reducing or
limiting care (e.g., protocols calling for
the discontinuance of a prophylactic
antibiotic after a specific period of
time)? Should hospitals deciding to
compensate physicians in connection
with the use of such protocols be
required to maintain quality-monitoring
procedures to ensure that these
protocols do not, even inadvertently,
involve reductions in care? What types
of monitoring and documentation
would be reasonable and appropriate?
• Should a hospital desiring to
standardize items or processes as part of
a gainsharing program be required to
establish certain thresholds based on
historical experience or clinical
protocols, beyond which participating
physicians could not share in cost
savings (i.e., change beyond the relevant
threshold would be deemed to
constitute reducing or limiting
services)? For example, in OIG Advisory
Opinion 05–01, the hospital had a
policy of performing blood crossmatching (in addition to typing and
screening) in all cases and proposed to
perform cross-matching only when a
patient required a transfusion. The facts
in that opinion were that less than 30
percent of cases actually required
transfusions, so 30 percent was used as
the threshold. Therefore, the surgeon
group would not receive any share of
savings resulting from performing crossmatching in fewer than 30 percent of
cases.
• If we define ‘‘reduce or limit
services,’’ should the regulation include
a requirement that the hospital and/or
physician participating in a gainsharing
program notify potentially affected
patients about the program? Would such
a requirement help ensure that
gainsharing payments were for
legitimate purposes and not for the
purpose of reducing or limiting care?
Our proposal to define the term
‘‘reduce or limit services’’ and our
solicitation of comments related to that
definition reflect our recognition that
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the delivery of health care, and the
potential safeguards to protect patients
and promote accountability for
outcomes, has been changing. We seek
to interpret the statutory prohibition
broadly enough to protect beneficiaries
and Federal health care programs, but
narrowly enough to allow low risk
programs that further the goal of
delivering high quality health care at a
lower cost. We emphasize that this
proposed regulation would interpret the
Gainsharing CMP. We have no authority
to create an exception to the statute.
III. Regulatory Impact Statement
We have examined the impact of this
proposed rule as required by Executive
Order 12866, the Regulatory Flexibility
Act (RFA) of 1980, the Unfunded
Mandates Reform Act of 1995, and
Executive Order 13132.
Executive Order 12866
Executive Order 12866 directs
agencies to assess all costs and benefits
of available regulatory alternatives and,
if regulations are necessary, to select
regulatory approaches that maximize
net benefits (including potential
economic, environmental, public health
and safety effects; distributive impacts;
and equity). A regulatory impact
analysis must be prepared for major
rules with economically significant
effects, i.e., $100 million or more in any
given year. This is not a major rule as
defined at 5 U.S.C. 804(2); it is not
economically significant because it does
not reach that economic threshold.
This proposed rule would implement
or codify new and existing CMP
authorities and exceptions and
implement new or revised anti-kickback
statute safe harbors. The vast majority of
providers and Federal health care
programs would be minimally
impacted, if at all, by these proposed
revisions.
The changes to the safe harbors and
CMP authorities and exceptions would
allow providers to enter into certain
beneficial arrangements. In doing so,
this regulation would impose no
requirements on any party. Providers
would be allowed to voluntarily seek to
comply with these provisions so that
they would have assurance that
participating in certain agreements
would not subject them to liability
under the anti-kickback statute and the
beneficiary inducement or gainsharing
CMPs. These safe harbors and
exceptions facilitate providers’ ability to
provide important health care and
related services to communities in need.
We believe that the aggregate economic
impact of the changes to these
regulations would be minimal and
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would have no effect on the economy or
on Federal or State expenditures.
Accordingly, we believe that the
likely aggregate economic effect of these
regulations would be significantly less
than $100 million.
Regulatory Flexibility Act
The RFA and the Small Business
Regulatory Enforcement and Fairness
Act of 1996, which amended the RFA,
require agencies to analyze options for
regulatory relief of small businesses. For
purposes of the RFA, small entities
include small businesses, non-profit
organizations, and government agencies.
Most providers are considered small
entities by having revenues of $7
million to $35.5 million or less in any
one year. For purposes of the RFA, most
physicians and suppliers are considered
small entities.
The changes to the CMP provisions
would be minimal, and the changes to
the anti-kickback statute safe harbors
would not significantly affect small
providers as these would not impose
any requirement on any party.
In summary, we have concluded that
this proposed rule should not have a
significant impact on the operations of
a substantial number of small providers
and that a regulatory flexibility analysis
is not required for this rulemaking.
In addition, section 1102(b) of the Act
(42 U.S.C. 1302) requires us to prepare
a regulatory impact analysis if a rule
under Titles XVIII or XIX or section B
of Title XI of the Act may have a
significant impact on the operations of
a substantial number of small rural
hospitals. For the reasons stated above,
we do not believe that any provisions or
changes proposed here would have a
significant impact on the operations of
rural hospitals. Thus, an analysis under
section 1102(b) is not required for this
rulemaking.
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Unfunded Mandates Reform Act
Section 202 of the Unfunded
Mandates Reform Act of 1995, Public
Law 104–4, also requires that agencies
assess anticipated costs and benefits
before issuing any rule that may result
in expenditures in any one year by
State, local, or tribal governments, in the
aggregate, or by the private sector, of
$100 million, adjusted for inflation. We
believe that no significant costs would
be associated with these proposed
revisions that would impose any
mandates on State, local, or tribal
governments or the private sector that
would result in an expenditure of $141
million (after adjustment for inflation)
in any given year.
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Executive Order 13132
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a rule
that imposes substantial direct
requirements or costs on State and local
governments, preempts State law, or
otherwise has Federalism implications.
In reviewing this rule under the
threshold criteria of Executive Order
13132, we have determined that this
proposed rule would not significantly
affect the rights, roles, and
responsibilities of State or local
governments.
IV. Paperwork Reduction Act
This document does not impose
information collection and
recordkeeping requirements.
Consequently, it need not be reviewed
by the Office of Management and
Budget under the authority of the
Paperwork Reduction Act of 1995.
List of Subjects
42 CFR Part 1001
Administrative practice and
procedure, Fraud, Grant programs—
health, Health facilities, Health
professions, Maternal and child health,
Medicaid, Medicare.
42 CFR Part 1003
Fraud, Grant programs—health,
Health facilities, Health professions,
Medicaid, Reporting and recordkeeping.
For the reasons set forth in the
preamble, the Office of Inspector
General, Department of Health and
Human Services, proposes to amend 42
CFR chapter V as follows:
PART 1001—PROGRAM INTEGRITY—
MEDICARE AND STATE HEALTH
CARE PROGRAMS
1. The authority citation for part 1001
continues to read as follows:
■
Authority: 42 U.S.C. 1302, 1320a–7,
1320a–7b, 1395u(j), 1395u(k), 1395w–
104(e)(6), 1395y(d), 1395y(e),
1395cc(b)(2)(D), (E) and (F), and 1395hh; and
sec. 2455, Public Law 103–355, 108 Stat.
3327 (31 U.S.C. 6101 note).
2. Section 1001.952 is amended by
revising paragraphs (f)(2), (k)
introductory text, and by adding
paragraphs (k)(3), (k)(4), (z), (aa), and
(bb) to read as follows:
■
§ 1001.952
Exceptions.
*
*
*
*
*
(f) * * *
(2) Any payment the participant
makes to the referral service is assessed
equally against and collected equally
from all participants and is based only
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on the cost of operating the referral
service, and not on the volume or value
of any referrals to or business otherwise
generated by either party for the other
party for which payment may be made
in whole or in part under Medicare,
Medicaid, or ther Federal health care
programs.
*
*
*
*
*
(k) Waiver of beneficiary coinsurance
and deductible amounts. As used in
section 1128B of the Act,
‘‘remuneration’’ does not include any
reduction or waiver of a Medicare or a
State health care program beneficiary’s
obligation to pay coinsurance or
deductible amounts as long as all the
standards are met within one of the
following categories of health care
providers or suppliers.
*
*
*
*
*
(3) If the copayment, coinsurance, or
deductible amounts are owed to a
pharmacy (including, but not limited to,
pharmacies of the Indian Health
Service, Indian tribes, tribal
organizations, and urban Indian
organizations) for cost-sharing imposed
under part D of Title XVIII provided
that—
(i) The waiver is not offered as part of
an advertisement or solicitation and
(ii) Except for waivers or reductions
offered to subsidy-eligible individuals
(as defined in section 1860D–14(a)(3)) to
which only requirement in paragraph
(k)(3)(i) of this section applies:
(A) The pharmacy does not routinely
waive copayment, coinsurance, or
deductible amounts and
(B) The pharmacy waives the
copayment, coinsurance, or deductible
amounts only after determining in good
faith that the individual is in financial
need or fails to collect the copayment,
coinsurance, or deductible after making
reasonable collection efforts.
(4) If the coinsurance or deductible
amounts are owed to an ambulance
provider or supplier for emergency
ambulance services for which Medicare
pays under a fee-for-service payment
system and all the following conditions
are met:
(i) The ambulance provider or
supplier is owned and operated by a
State, a political subdivision of a State,
or a federally recognized Indian tribe;
(ii) The ambulance provider or
supplier is the Medicare Part B provider
or supplier of the emergency ambulance
services;
(iii) The ambulance provider’s or
supplier’s reduction or waiver of
coinsurance or deductible amounts is
not considered to be the furnishing of
free services paid for directly or
indirectly by a government entity;
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(iv) The ambulance supplier offers the
reduction or waiver on a uniform basis,
without regard to patient-specific
factors; and
(v) The ambulance provider or
supplier must not later claim the
amount reduced or waived as a bad debt
for payment purposes under Medicare
or otherwise shift the burden of the
reduction or waiver onto Medicare, a
State health care program, other payers,
or individuals.
*
*
*
*
*
(z) As used in section 1128B of the
Act, ‘‘remuneration’’ does not include
any remuneration between a federally
qualified health center (or an entity
controlled by such a health center) and
a Medicare Advantage organization
pursuant to a written agreement
described in section 1853(a)(4) of the
Act.
(aa) Medicare Coverage Gap Discount
Program. As used in section 1128B of
the Act, ‘‘remuneration’’ does not
include a discount in the price of a drug
when the discount is furnished to a
beneficiary under the Medicare
Coverage Gap Discount Program
established in section 1860D–14A of the
Act, so long as all the following
requirements are met:
(1) The discounted drug meets the
definition of ‘‘applicable drug’’ set forth
in section 1860D–14A(g) of the Act;
(2) The beneficiary receiving the
discount meets the definition of
‘‘applicable beneficiary’’ set forth in
section 1860D–14A(g) of the Act; and
(3) The manufacturer of the drug
participates in, and is in full compliance
with all requirements of, the Medicare
Coverage Gap Discount Program.
(bb) Local Transportation. As used in
section 1128B of the Act,
‘‘remuneration’’ does not include free or
discounted local transportation made
available by an Eligible Entity (as
defined in this paragraph (bb)) to
established patients who are Federal
health care program beneficiaries for the
purpose of obtaining medically
necessary items or services if all the
following conditions are met:
(1) The availability of the free or
discounted local transportation services
is not determined in a manner related to
the past or anticipated volume or value
of Federal health care program business;
(2) The free or discounted local
transportation services do not take the
form of air, luxury, or ambulance-level
transportation;
(3) The free or discounted local
transportation services are not marketed
or advertised, no marketing of health
care items and services occurs during
the course of the transportation or at any
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time by drivers who provide the
transportation, and drivers or others
arranging for the transportation are not
paid on a per-beneficiary transported
basis;
(4) The Eligible Entity that makes the
free or discounted transportation
available furnishes the services only:
(i) To the established patient (and, if
needed, a person to assist the patient) to
obtain medically necessary items or
services, and
(ii) Within the local area of the health
care provider or supplier to which the
patient would be transported;
(5) The Eligible Entity that makes the
transportation available bears the costs
of the free or discounted local
transportation services and does not
shift the burden of these costs onto
Medicare, a State health care program,
other payers, or individuals.
Note to paragraph (bb): For purposes
of this paragraph (bb), an ‘‘Eligible
Entity’’ is any individual or entity,
except for individuals or entities (or
family members or others acting on their
behalf) that primarily supply health care
items; and if the distance from the
patient’s location to the provider or
supplier to which the patient would be
transported is no more than 25 miles,
the transportation is deemed to be local.
PART 1003—CIVIL MONEY
PENALTIES, ASSESSMENTS AND
EXCLUSIONS
3. The authority citation for part 1003
continues to read as follows:
■
Authority: 42 U.S.C. 262a, 1302, 1320–7,
1320a–7a, 1320b–10, 1395u(j), 1395u(k),
1395cc(j), 1395w–141(i)(3), 1395dd(d)(1),
1395mm, 1395nn(g), 1395ss(d), 1396b(m),
11131(c), and 11137(b)(2).
4. Section 1003.101 as proposed to be
redesignated as 1003.110 and amended
at 79 FR 27080 (May 12, 2014) is further
amended by adding the definition of
‘‘Hospital’’ and by amending the
definition of ‘‘Remuneration’’ by
revising the introductory text and
adding paragraphs (5) through (9) to
read as follows:
■
§ 1003.101
Definitions.
*
*
*
*
*
Hospital means a hospital as defined
in section 1861(e) of the Act or critical
access hospital as defined in section
1861(mm)(1) of the Act.
*
*
*
*
*
Remuneration, for the purposes of
§ 1003.1000(a) of this part, is consistent
with the definition in section
1128A(i)(6) of the Act and includes the
waiver of coinsurance and deductible
amounts (or any part thereof) and
transfers of items or services for free or
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for other than fair market value. The
term ‘‘remuneration’’ does not include—
*
*
*
*
*
(5) A reduction in the copayment
amount for covered OPD services under
section 1833(t)(8)(B) of the Act;
(6) [Reserved];
(7) The offer or transfer of items or
services for free or less than fair market
value by a person if—
(i) The items or services consist of
coupons, rebates, or other rewards from
a retailer;
(ii) The items or services are offered
or transferred on equal terms available
to the general public, regardless of
health insurance status; and
(iii) The offer or transfer of the items
or services is not tied to the provision
of other items or services reimbursed in
whole or in part by the program under
title XVIII or a State health care program
(as defined in section 1128(h) of the
Act);
(8) The offer or transfer of items or
services for free or less than fair market
value by a person, if—
(i) The items or services are not
offered as part of any advertisement or
solicitation;
(ii) The offer or transfer of the items
or services is not tied to the provision
of other items or services reimbursed in
whole or in part by the program under
Title XVIII or a State health care
program;
(iii) There is a reasonable connection
between the items or services and the
medical care of the individual; and
(iv) The person provides the items or
services after determining in good faith
that the individual is in financial need;
(9) Waivers by a sponsor of a
Prescription Drug Plan under part D of
Title XVIII or a Medicare Advantage
organization offering an MA–PD Plan
under part C of such title of any
copayment for the first fill of a covered
Part D drug (as defined in section
1860D–2(e)) that is a generic drug (as
defined in 42 CFR 423.4) for individuals
enrolled in the Prescription Drug Plan
or MA–PD Plan, respectively, as long as
such waivers are included in the benefit
design package submitted to CMS. This
exception is effective for coverage years
beginning after publication of the final
rule.
*
*
*
*
*
■ 5. Part 1003, as proposed to be
amended at 79 FR 27080, (May 12,
2014) is further amended by adding
subpart G to read as follows:
Subpart G—CMPs for Gainsharing
Violations
Sec.
1003.700
E:\FR\FM\03OCP1.SGM
Basis for civil money penalties.
03OCP1
Federal Register / Vol. 79, No. 192 / Friday, October 3, 2014 / Proposed Rules
1003.710 Amount of penalties.
1003.720 Determinations regarding the
amount of penalties.
§ 1003.700
DEPARTMENT OF COMMERCE
Basis for civil money penalties.
OIG may impose a penalty against any
person who it determines in accordance
with this part—
(a) Is a hospital that knowingly makes
a payment, directly or indirectly, overtly
or covertly, in cash or in kind, to a
physician as an inducement to reduce or
limit services provided to an individual
who is eligible for Medicare or Medicaid
benefits and who is under the direct
care of the physician;
(b) Is a physician who knowingly
receives a payment described in
paragraph (a) of this section.
§ 1003.710
Amount of penalties.
(a) OIG may impose a penalty against
a hospital of not more than $2,000 for
each individual for whom payment was
made to a physician in violation of
§ 1003.700.
(b) OIG may impose a penalty against
a physician of not more than $2,000 for
each individual for whom the physician
received payment from a hospital in
violation of § 1003.700.
§ 1003.720 Determinations regarding the
amount of penalties.
rmajette on DSK2TPTVN1PROD with PROPOSALS
In determining the amount of any
penalty or assessment, OIG will
consider the factors listed in § 1003.140,
as well as the following:
(a) The nature of the payment
designed to reduce or limit services and
the circumstances under which it was
made,
(b) The extent to which the payment
encouraged the limiting of medical care
or the premature discharge of the
patient,
(c) The extent to which the payment
caused actual or potential harm to
program beneficiaries, and
(d) The financial condition of the
hospital (or physician) involved in the
offering (or acceptance) of the payment.
Dated: March 1, 2014.
Daniel R. Levinson,
Inspector General.
Approved: September 18, 2014.
Sylvia M. Burwell,
Secretary.
[FR Doc. 2014–23182 Filed 10–2–14; 8:45 am]
BILLING CODE 4152–01–P
VerDate Sep<11>2014
14:51 Oct 02, 2014
Jkt 235001
National Oceanic and Atmospheric
Administration
50 CFR Part 679
[Docket No. 140519437–4437–01]
RIN 0648–BE24
Fisheries of the Exclusive Economic
Zone Off Alaska; Establishing Transit
Areas through Walrus Protection
Areas at Round Island and Cape
Peirce, Northern Bristol Bay, Alaska
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Proposed rule; request for
comments.
AGENCY:
NMFS issues a proposed rule
that would implement Amendment 107
to the Fishery Management Plan for
Groundfish of the Bering Sea and
Aleutian Islands Management Area
(BSAI FMP). If approved, Amendment
107 would establish seasonal transit
areas for vessels designated on Federal
Fisheries Permits (FFPs) through Walrus
Protection Areas in northern Bristol
Bay, AK. This action would allow
vessels designated on FFPs to transit
through Walrus Protection Areas in the
Exclusive Economic Zone (EEZ) near
Round Island and Cape Peirce from
April 1 through August 15, annually.
This action is necessary to restore the
access of federally permitted vessels to
transit through Walrus Protection Areas
that was limited by regulations
implementing Amendment 83 to the
Fishery Management Plan for
Groundfish of the Gulf of Alaska (GOA
FMP) and to maintain suitable
protection for walruses on Round Island
and Cape Peirce. This action would
maintain an existing prohibition on
deploying fishing gear in Walrus
Protection Areas by vessels designated
on an FFP. This action is intended to
promote the goals and objectives of the
Magnuson-Stevens Fishery
Conservation and Management Act, the
BSAI FMP, and other applicable law.
DATES: Submit comments on or before
November 3, 2014.
ADDRESSES: You may submit comments
on this document, identified by NOAA–
NMFS–2014–0066, by either of the
following methods:
• Electronic Submission: Submit all
electronic public comments via the
Federal e-Rulemaking Portal. Go to
www.regulations.gov/
#!docketDetail;D=NOAA-NMFS-20140066, click the ‘‘Comment Now!’’ icon,
SUMMARY:
PO 00000
Frm 00041
Fmt 4702
Sfmt 4702
59733
complete the required fields, and enter
or attach your comments.
• Mail: Submit written comments to
Glenn Merrill, Assistant Regional
Administrator, Sustainable Fisheries
Division, Alaska Region NMFS, Attn:
Ellen Sebastian. Mail comments to P.O.
Box 21668, Juneau, AK 99802–1668.
Instructions: Comments sent by any
other method, to any other address or
individual, or received after the end of
the comment period, may not be
considered by NMFS. All comments
received are a part of the public record
and will generally be posted for public
viewing on www.regulations.gov
without change. All personal identifying
information (e.g., name, address),
confidential business information, or
otherwise sensitive information
submitted voluntarily by the sender will
be publicly accessible. NMFS will
accept anonymous comments (enter
‘‘N/A’’ in the required fields if you wish
to remain anonymous). Attachments to
electronic comments will be accepted in
Microsoft Word, Excel, or Adobe PDF
file formats only.
Electronic copies of the
Environmental Assessment/Regulatory
Impact Review/Initial Regulatory
Flexibility Analysis (Analysis) prepared
for this action are available from https://
www.regulations.gov or from the NMFS
Alaska Region Web site at
https://alaskafisheries.noaa.gov/
sustainablefisheries/.
Written comments regarding the
burden-hour estimates or other aspects
of the collection-of-information
requirements contained in this proposed
action may be submitted to NMFS at the
above address and by email to OIRA_
Submission@omb.eop.gov or fax to 202–
395–7285.
FOR FURTHER INFORMATION CONTACT:
Anne Marie Eich, 907–586–7172.
SUPPLEMENTARY INFORMATION: NMFS
manages groundfish fisheries in the EEZ
off Alaska under the GOA FMP and the
BSAI FMP. The North Pacific Fishery
Management Council (Council)
prepared these FMPs under the
authority of the Magnuson-Stevens
Fishery Conservation and Management
Act (Magnuson-Stevens Act), 16 U.S.C.
1801, et seq. Regulations governing U.S.
fisheries and implementing the FMPs
appear at 50 CFR parts 600 and 679.
Background
The following sections of the
preamble describe: (1) The Walrus
Protection Areas; (2) the effects of
disturbance on walruses; (3) the areas
and vessels affected by this proposed
action; and (4) the proposed action.
E:\FR\FM\03OCP1.SGM
03OCP1
Agencies
[Federal Register Volume 79, Number 192 (Friday, October 3, 2014)]
[Proposed Rules]
[Pages 59717-59733]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-23182]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General
42 CFR Parts 1001 and 1003
RIN 0936-AA06
Medicare and State Health Care Programs: Fraud and Abuse;
Revisions to Safe Harbors Under the Anti-Kickback Statute, and Civil
Monetary Penalty Rules Regarding Beneficiary Inducements and
Gainsharing
AGENCY: Office of Inspector General (OIG), HHS.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would amend the safe harbors to the anti-
kickback statute and the civil monetary penalty (CMP) rules under the
authority of the Office of Inspector General (OIG). The proposed rule
would add new safe harbors, some of which codify statutory changes set
forth in the Medicare Prescription Drug, Improvement, and Modernization
Act of 2003 (MMA) and the Patient Protection and Affordable Care Act,
Public Law 111-148, 124 Stat. 119 (2010), as amended by the Health Care
and Education Reconciliation Act of 2010, Public Law 111-152, 124 Stat.
1029 (2010) (ACA), and all of which would protect certain payment
practices and business arrangements from criminal prosecution or civil
sanctions under the anti-kickback statute. We also propose to codify
revisions to the definition of ``remuneration,'' added by the Balanced
Budget Act (BBA) of 1997 and ACA, and add a gainsharing CMP provision
in our regulations.
DATES: To ensure consideration, comments must be delivered to the
address provided below by no later than 5 p.m. Eastern Standard Time on
December 2, 2014.
ADDRESSES: In commenting, please reference file code OIG-403-P3.
Because of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission. However, you may submit comments using
one of three ways (no duplicates, please):
1. Electronically. You may submit electronically through the
Federal eRulemaking Portal at https://www.regulations.gov. (Attachments
should be in Microsoft Word, if possible.)
2. By regular, express, or overnight mail. You may mail your
printed or written submissions to the following address:
Patrice Drew, Office of Inspector General, Department of Health
and Human Services, Attention: OIG-403-P, Room 5269, Cohen Building,
330 Independence Avenue SW., Room 5269, Washington, DC 20201.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By hand or courier. You may deliver, by hand or courier, before
the close of the comment period, your printed or written comments to:
Patrice Drew, Office of Inspector General, Department of Health
and Human Services, Cohen Building, 330 Independence Avenue SW.,
Room 5269, Washington, DC 20201.
Because access to the interior of the Cohen Building is not readily
available to persons without Federal Government identification,
commenters are encouraged to schedule their delivery with one of our
staff at (202) 619-1368.
Inspection of Public Comments: All comments received before the end
of the comment period will be posted on https://www.regulations.gov for
public viewing. Hard copies will also be available for public
inspection at the Office of Inspector General, Department of Health and
Human Services, Cohen Building, 330 Independence Avenue SW.,
Washington, DC 20201, Monday through Friday from 8:30 a.m. to 4 p.m. To
schedule an appointment to view public comments, phone (202) 619-1368.
FOR FURTHER INFORMATION CONTACT: Heather Westphal, Office of Counsel to
the Inspector General, (202) 619-0335, for questions relating to the
proposed rule.
Executive Summary
A. Need For Regulatory Action
MMA and ACA include exceptions to the anti-kickback statute, and
BBA of 1997 and ACA include exceptions to the definition of
``remuneration'' under the civil monetary penalties law. OIG proposes
to codify those changes here. At the same time, OIG proposes additional
changes to make technical corrections to an existing regulation and
proposes new safe harbors to the anti-
[[Page 59718]]
kickback statute to protect certain services that the industry has
expressed an interest in offering and that we believe could be, if
properly structured and with appropriate safeguards, low risk to
Federal health care programs. Finally, the civil monetary penalties law
includes a gainsharing CMP provision that has yet to be codified in
regulations. We propose to interpret and codify that provision in this
proposed rule.
B. Summary of Major Provisions
1. Anti-Kickback Statute and Safe Harbors
We propose to amend 42 CFR 1001.952 by modifying certain existing
safe harbors to the anti-kickback statute and by adding safe harbors
that provide new protections or codify certain existing statutory
protections. These changes include:
A technical correction to the existing safe harbor for
referral services;
protection for certain cost-sharing waivers, including:
Pharmacy waivers of cost-sharing for financially needy
Medicare Part D beneficiaries; and
waivers of cost-sharing for emergency ambulance services
furnished by State- or municipality-owned ambulance services;
protection for certain remuneration between Medicare
Advantage organizations and federally qualified health centers;
protection for discounts by manufacturers on drugs
furnished to beneficiaries under the Medicare Coverage Gap Discount
Program; and
protection for free or discounted local transportation
services that meet specified criteria.
2. Civil Monetary Penalty Authorities
We propose to amend the definition of ``remuneration'' in the CMP
regulations at 42 CFR 1003 by adding certain statutory exceptions for:
Copayment reductions for certain hospital outpatient
department services;
certain remuneration that poses a low risk of harm and
promotes access to care;
coupons, rebates, or other retailer reward programs that
meet specified requirements;
certain remuneration to financially needy individuals; and
copayment waivers for the first fill of generic drugs.
We also propose to codify the gainsharing CMP set forth in section
1128A(b) of the Social Security Act (the Act) (42 U.S.C. 1320a-7a(b)).
C. Costs and Benefits
There are no significant costs associated with the proposed
regulatory revisions that would impose any mandates on State, local, or
tribal governments or on the private sector.
SUPPLEMENTARY INFORMATION: This notice of proposed rulemaking is part
of a rulemaking that was identified in the Unified Agenda by the title
``Medicare and State Health Care Programs: Fraud and Abuse; Revisions
to the Office of Inspector General's Safe Harbors Under the Anti-
Kickback Statute, Exclusion Authorities, and Civil Monetary Penalty
Rules.'' OIG has proposed additional rulemaking in the following areas:
CMP authorities (42 CFR part 1003); inflation adjustment for CMPs (42
CFR part 1003); and exclusion authorities and the duties and
responsibilities of State Medicaid Fraud Control Units (MFCUs) 42 CFR
parts 1000, 1001, 1002, and 1006. Each of the proposed rules is a
stand-alone, independent rule, and thus, one can comment meaningfully
on this proposed rule independent of the proposed rules concerning CMP
authorities, inflation adjustment for CMPs, exclusion authorities, or
authorities and duties of the MFCUs.
I. Background
A. Anti-Kickback Statute and Safe Harbors
Section 1128B(b) of the Act (42 U.S.C. 1320a-7b(b), the anti-
kickback statute) provides criminal penalties for individuals or
entities that knowingly and willfully offer, pay, solicit, or receive
remuneration in order to induce or reward the referral of business
reimbursable under Federal health care programs, as defined in section
1128B(f) of the Act. The offense is classified as a felony and is
punishable by fines of up to $25,000 and imprisonment for up to 5
years. Violations may also result in the imposition of CMPs under
section 1128A(a)(7) of the Act (42 U.S.C. 1320a-7a(a)(7)), program
exclusion under section 1128(b)(7) of the Act (42 U.S.C. 1320a-
7(b)(7)), and liability under the False Claims Act (31 U.S.C. 3729-33).
The types of remuneration covered specifically include, without
limitation, kickbacks, bribes, and rebates, whether made directly or
indirectly, overtly or covertly, in cash or in kind. In addition,
prohibited conduct includes not only the payment of remuneration
intended to induce or reward referrals of patients, but also the
payment of remuneration intended to induce or reward the purchasing,
leasing, or ordering of, or arranging for or recommending the
purchasing, leasing, or ordering of, any good, facility, service, or
item reimbursable by any Federal health care program.
Because of the broad reach of the statute, concern was expressed
that some relatively innocuous commercial arrangements were covered by
the statute and, therefore, potentially subject to criminal
prosecution. In response, Congress enacted section 14 of the Medicare
and Medicaid Patient and Program Protection Act of 1987, Public Law
100-93 (section 1128B(b)(3)(E) of the Act), which specifically requires
the development and promulgation of regulations, the so-called safe
harbor provisions, that would specify various payment and business
practices that would not be treated as criminal offenses under the
anti-kickback statute, even though they may potentially be capable of
inducing referrals of business under the Federal health care programs.
Section 205 of the Health Insurance Portability and Accountability
Act of 1996, Public Law 104-191, established section 1128D of the Act,
which includes criteria for modifying and establishing safe harbors.
Specifically, section 1128D(a)(2) of the Act provides that, in
modifying and establishing safe harbors, the Secretary of Health and
Human Services (Secretary) may consider whether a specified payment
practice may result in:
An increase or decrease in access to health care services;
an increase or decrease in the quality of health care
services;
an increase or decrease in patient freedom of choice among
health care providers;
an increase or decrease in competition among health care
providers;
an increase or decrease in the ability of health care
facilities to provide services in medically underserved areas or to
medically underserved populations;
an increase or decrease in the cost to Federal health care
programs;
an increase or decrease in the potential overutilization
of health care services;
the existence or nonexistence of any potential financial
benefit to a health care professional or provider, which benefit may
vary depending on whether the health care professional or provider
decides to order a health care item or service or arrange for a
referral of health care items or services to a particular practitioner
or provider;
any other factors the Secretary deems appropriate in the
interest of preventing fraud and abuse in Federal health care programs.
Since July 29, 1991, we have published in the Federal Register a
[[Page 59719]]
series of final regulations establishing safe harbors in various
areas.\1\ These provisions have been developed ``to limit the reach of
the statute somewhat by permitting certain non-abusive arrangements,
while encouraging beneficial or innocuous arrangements.'' (56 FR 35952,
35958 (July 29, 1991).) Many of the safe harbors create new exemptions,
while other safe harbors interpret exceptions already promulgated by
statute.
---------------------------------------------------------------------------
\1\ 56 FR 35952 (July 29, 1991); 61 FR 2122 (Jan. 25, 1996); 64
FR 63518 (Nov. 19, 1999); 64 FR 63504 (Nov. 19, 1999); 66 FR 62979
(Dec. 4, 2001); 71 FR 45110 (Aug. 8, 2006); and 72 FR 56632 (Oct. 4,
2007).
---------------------------------------------------------------------------
Health care providers and others may voluntarily seek to comply
with safe harbors so that they have the assurance that their business
practices will not be subject to enforcement action under the anti-
kickback statute, the CMP provision for anti-kickback violations, or
the program exclusion authority related to kickbacks. We note, however,
that compliance with a safe harbor insulates an individual or entity
from liability under the anti-kickback statute and the beneficiary
inducements CMP \2\ only; individuals and entities remain responsible
for complying with all other laws, regulations, and guidance that apply
to their businesses. In authorizing the Department of Health and Human
Services (Department or HHS) to protect certain arrangements and
payment practices under the anti-kickback statute, Congress intended
the safe harbor regulations to be updated periodically to reflect
changing business practices and technologies in the health care
industry.
---------------------------------------------------------------------------
\2\ Pursuant to section 1128A(i)(6)(B), any practice permissible
under the anti-kickback statute, whether through statutory exception
or regulations issued by the Secretary, is also excepted from the
beneficiary inducements CMP.
---------------------------------------------------------------------------
Section 101 of MMA added a new section 1860D to the Act,
establishing the Part D prescription drug benefit in the Medicare
program. Section 101(e) of MMA amends section 1128B(b)(3) of the Act to
permit pharmacies to waive or reduce cost-sharing imposed under Part D
as long as specified conditions are met. In addition, section 237 of
MMA added an exception to permit certain remuneration between Medicare
Advantage organizations and federally qualified health centers.
ACA also includes a number of provisions that could affect
liability under the anti-kickback statute. Section 3301 of ACA
establishes the Medicare Coverage Gap Discount Program, codified at new
section 1860D-14A of the Act (42 U.S.C. 1395w-114A). Pursuant to this
program, prescription drug manufacturers have entered into agreements
with the Secretary to provide certain beneficiaries access to discounts
on drugs at the point of sale. Section 3301(d) of ACA amends the anti-
kickback statute to protect the discounts provided for under the
Medicare Coverage Gap Discount Program.
We are proposing to incorporate into our regulations safe harbors
for payment and business practices permitted under MMA and ACA, as well
as proposing new safe harbors pursuant to our authority under section
14 of the Medicare and Medicaid Patient and Protection Act of 1987 to
protect practices that we view as posing a low risk to Federal health
care programs as long as specified conditions are met.
B. Civil Monetary Penalty Authorities
1. Overview of OIG Civil Monetary Penalty Authorities
In 1981, Congress enacted the CMP law, section 1128A of the Act, as
one of several administrative remedies to combat fraud and abuse in
Medicare and Medicaid. The law authorized the Secretary to impose
penalties and assessments on persons who defrauded Medicare or Medicaid
or engaged in certain other wrongful conduct. The CMP law also
authorized the Secretary to exclude persons from Federal health care
programs (as defined in section 1128B(f)(1) of the Act) and to direct
the appropriate State agency to exclude the person from participating
in any State health care programs (as defined in section 1128(h) of the
Act). Congress later expanded the CMP law and the scope of exclusion to
apply to all Federal health care programs, but the CMP applicable to
beneficiary inducements remains limited to Medicare and State health
care program beneficiaries. The Secretary delegated the law's CMP
authorities to OIG. 53 FR 12993 (April 20, 1988). Since 1981, Congress
has created various other CMP authorities covering numerous types of
fraud and abuse, many of which were also delegated by the Secretary to
OIG.
2. The Definition of ``Remuneration''
The BBA of 1997 and section 6402(d)(2)(B) of ACA amended the
definition of ``remuneration'' for purposes of the beneficiary
inducements CMP at section 1128A(a)(5) of the Act, as discussed below.
We propose to incorporate these changes into the definition of
``remuneration'' under proposed Sec. 1003.110 \3\ (current Sec.
1003.101).
---------------------------------------------------------------------------
\3\ The Secretary proposed a reorganization of Part 1003. See
Notice of Proposed Rulemaking RIN 0936-AA04, Medicare and State
Health Care Programs: Fraud and Abuse; Revisions to the Office of
Inspector General's Civil Monetary Penalty Rules, published on May
12, 2014 (79 FR 27080) (CMP NPRM); this proposed rule uses the
section designations proposed in the CMP NPRM, together with current
section numbers.
---------------------------------------------------------------------------
3. The Gainsharing CMP
Public Law 99-509, the Omnibus Budget Reconciliation Act (OBRA) of
1986, authorized the Secretary to impose CMPs for certain incentive
payments made to physicians by hospitals, risk-sharing health
maintenance organizations (HMOs), and competitive medical plans. Over
time, this provision, section 1128A(b) of the Act (the Gainsharing
CMP), has been amended to repeal the provisions relating to HMOs and
other risk-sharing entities and to make various other changes in
terminology.\4\ See section 6003(g)(3) of Public Law 101-239, OBRA of
1989; section 4204(a)(3) and 4731(b) of Public Law 101-508, OBRA of
1990; and section 4201(c) of the BBA of 1997.
---------------------------------------------------------------------------
\4\ Requirements relating to physician incentive plans in HMOs
and other risk-sharing entities are now set forth in section 1876(i)
of the Act.
---------------------------------------------------------------------------
Section 1128A(b)(1) prohibits a hospital or a critical access
hospital from knowingly making a payment, directly or indirectly, to a
physician as an inducement to reduce or limit services provided to
Medicare or Medicaid beneficiaries who are under the direct care of the
physician. A hospital or a critical access hospital that makes such
payment and the physician who knowingly accepts such payment are
subject to CMPs of not more than $2,000 for each beneficiary for whom
the payment is made.
II. Provisions of the Proposed Rule
A. Anti-Kickback Statute and Safe Harbors
Below is a description of the additional payment practices that we
are proposing to incorporate under 42 CFR 1001.952 pursuant to the
authorities cited under each heading and the rationale for their
inclusion in this proposed rulemaking. Consistent with the criteria set
forth in section 1128D(a)(2) for modifying and establishing safe
harbors, our goal 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 undue risk of harm associated with
referral payments. We seek to strike an appropriate balance between
protections for beneficial arrangements and safeguards to prevent
unscrupulous
[[Page 59720]]
individuals and entities from taking advantage of the safe harbors to
increase costs to programs and patients or compromise quality of care.
We seek comments on how best to do this with respect to all of our
proposals below.
1. Referral Services
We propose to make a technical correction to the safe harbor for
referral services, found at 42 CFR 1001.952(f). This safe harbor
originally required that any fee a referral service charged a
participant be ``based on the cost of operating the referral service,
and not on the volume or value of any referrals to or business
otherwise generated by the participants for the referral service * *
*''. This language created an unintended ambiguity, such that the safe
harbor could have been viewed as permitting referral services to adjust
their fees on the basis of the volume of referrals they make to the
participants. In 1999, we finalized a modification to the language to
clarify that the safe harbor precludes protection for payments from
participants to referral services that are based on the volume or value
of referrals to, or business otherwise generated by, either party for
the other party. See 64 FR 63518, 63526 (Nov. 19, 1999). During
subsequent revisions to the safe harbor by which we intended to make a
technical correction clarifying that OIG's exclusion authority applied
to all Federal health care programs rather than only to Medicare and
State health care programs, the language in Sec. 1001.952(f)(2)
inadvertently was changed to ``* * * or business otherwise generated by
either party for the referral service * * *.'' See 67 FR 11928, 11929
and 11934 (Mar. 18, 2002). Therefore, we propose to make a technical
correction and revert to the language in the 1999 final rule cited
above.
2. Cost-Sharing Waivers
Generally, the reduction or waiver of Medicare or other Federal
health care program cost-sharing amounts may implicate the anti-
kickback statute. Our concern about potentially abusive waivers of
cost-sharing amounts under the anti-kickback statue is longstanding.
For example, we have previously stated that providers and suppliers
that routinely waive Medicare cost-sharing amounts for reasons
unrelated to individualized, good faith assessments of financial
hardship may be held liable under the anti-kickback statute. See e.g.,
Special Fraud Alert, 59 FR 65372, 65374 (Dec. 19, 1994). Such waivers
may constitute prohibited remuneration to induce referrals under the
anti-kickback statute, as well as violations of the CMP prohibition
against inducements to beneficiaries, found in section 1128A(a)(5) of
the Act. We propose to modify Sec. 1001.952(k) by adding two new
subparagraphs to protect certain cost-sharing waivers that pose a low
risk of harm and make technical corrections to the introductory
language to account for new subparagraphs. In addition, we note that
subparagraph (k) is limited to reductions or waivers of Medicare and
State health care program beneficiary cost-sharing. We are considering
and solicit comments about expanding this safe harbor to protect
waivers under all Federal health care programs, if applicable, and
subject to each of the paragraphs below.
Part D Cost-Sharing Waivers by Pharmacies
As noted in section I.A above, MMA specifically amended section
1128B(b)(3) of the Act by adding a new subparagraph (G) that excepts
from liability under the anti-kickback statute waivers or reductions by
pharmacies (including pharmacies of the Indian Health Service, Indian
tribes, tribal organizations, and urban Indian organizations) of any
cost-sharing imposed under Medicare Part D, as long as certain
conditions are met. These conditions are specified in clauses (i)
through (iii) of section 1128A(i)(6)(A) of the Act, and we propose to
interpret them consistent with our regulations interpreting these
conditions in paragraph (1) of the definition of ``remuneration'' at
Sec. 1003.101.
We propose to add a new Sec. 1001.952(k)(3) reflecting this
exception to the anti-kickback statute. Thus, consistent with the
statute, a pharmacy waiving Part D cost-sharing qualifies for safe
harbor protection if: (1) The waiver or reduction is not advertised or
part of a solicitation; (2) the pharmacy does not routinely waive the
cost-sharing; and (3) before waiving 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 Act), then
conditions (2) and (3) above are not required. We reiterate, however,
that compliance with the conditions of this safe harbor, as with all
safe harbors, protects a individual or an entity from liability only
under the anti-kickback statute and the beneficiary inducements CMP,
pursuant to section 1128A(i)(6)(B) of the Act. Providers,
practitioners, and suppliers still must comply with other laws,
regulations, and Centers for Medicare & Medicaid Services (CMS) program
rules.
Cost-Sharing Waivers for Emergency Ambulance Services
Over the years, we have received many advisory opinion requests
concerning the reduction or waiver of coinsurance or deductible amounts
owed for emergency ambulance services to an ambulance supplier that is
owned and operated by a State or a political subdivision of a State,
resulting in many favorable advisory opinions (that is, approving of
such arrangements). Notwithstanding the vast body of favorable advisory
opinions, we continue to receive similar requests for advisory opinions
each year. In light of this, pursuant to our authority under section
1128B(b)(3)(E) of the Act, we propose to establish a safe harbor to
protect those reductions or waivers that meet all the conditions
enumerated in Sec. 1001.952(k)(4).
First, we propose to require that the ambulance provider or
supplier be owned and operated by a State, a political subdivision of a
State, or a federally recognized Indian tribe \5\ and be the Medicare
Part B provider or supplier of the emergency ambulance services. We
note that items and services that are paid for directly or indirectly
by a government entity (i.e., ``free services'') generally are not
reimbursable by Medicare,\6\ so we also propose to limit the safe
harbor protection to situations in which a provider's or supplier's
reduction or waiver of coinsurance or deductible is not considered to
be the furnishing of services paid for directly or indirectly by a
government entity, subject to applicable exceptions promulgated by CMS.
CMS has explained that certain cost-sharing waivers do not constitute
the provision of free services:
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\5\ Section 104 of the Federally Recognized Indian Tribe List
Act of 1994, Public Law 103-454, 108 Stat. 4791, requires the
Secretary to publish a list of all federally recognized Indian
tribes on an annual basis.
\6\ See 42 CFR Sec. 411.8.
A [State or local government] facility which reduces or waives
its charges for patients unable to pay, or charges patients only to
the extent of their Medicare and other health insurance coverage, is
not viewed as furnishing free services and may therefore receive
---------------------------------------------------------------------------
program payment.\7\
\7\ CMS Medicare Benefit Policy Manual, Pub. No. 100-02, ch. 16,
Sec. 50.3.1.
Notwithstanding the use of the term ``facility,'' CMS has confirmed
that this provision would apply to an ambulance provider or supplier
that was owned
[[Page 59721]]
and operated by a State or a political subdivision of a State and that
was the Medicare Part B provider or supplier of the emergency ambulance
services.
We also would require that the ambulance provider or supplier offer
the reduction or waiver on a uniform basis, without regard to patient-
specific factors. In addition, we propose to include an express
prohibition against 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 payers, or individuals. We solicit
comments on these proposed conditions.
For purposes of this safe harbor, we plan to interpret the term
``ambulance provider or supplier'' as a provider or supplier of
ambulance transport services that furnishes emergency ambulance
services. The term would not include a provider or supplier of
ambulance transport services that furnishes only nonemergency transport
services, because the safe harbor would only apply to the waiver of
cost-sharing in connection with emergency ambulance services. We plan
to interpret ``emergency ambulance services'' in a manner consistent
with the definition given to that term in 42 CFR 1001.952(v)(4)(iv). We
solicit comments on this interpretation and on whether these terms need
to be expressly defined in the regulatory text of this safe harbor.
Finally, we are considering whether to include reductions or
waivers of cost-sharing amounts owed under other Federal health care
programs (e.g., Medicaid) in the safe harbor. We solicit comments on
this consideration, and on what additional or different safeguards, if
any, might be required to protect against fraud, waste, and abuse.
This safe harbor would apply only to situations in which the
governmental unit owns and operates the ambulance provider or supplier;
it would not apply to contracts with outside ambulance providers or
suppliers. For example, if a municipality contracted with an outside
ambulance provider or supplier for rendering services to residents of
its service area, the municipality could not require the ambulance
provider or supplier to waive the collection from beneficiaries of out-
of-pocket cost-sharing amounts unless the municipality paid the cost-
sharing amounts owed or otherwise made provisions for paying them.
3. Federally Qualified Health Centers and Medicare Advantage
Organizations
An individual enrolled in a Medicare Advantage (MA) plan may
receive services from a federally qualified health center (FQHC) that
has a written agreement with the MA plan. Section 237 of MMA amended 42
U.S.C. 1395w-27(e) by adding a new paragraph (3) regarding agreements
between MA organizations and FQHCs. This new paragraph requires that
the written agreement between the two entities specifically provide
that 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 were furnished by another type of entity.
Section 237 also added a new statutory exception to the anti-kickback
statute at section 1128B(b)(3)(H) of the Act (42 U.S.C. 1320a-
7b(b)(3)(H)). This exception protects ``any remuneration between a
federally qualified health center (or an entity controlled by such a
health center) and an MA organization pursuant to a written agreement
described in section 1853(a)(4) [of the Act].'' \8\ We propose to
incorporate this exception into the safe harbor regulations as new
section 42 CFR 1001.952(z) and solicit comments on this proposal.
---------------------------------------------------------------------------
\8\ Section 1853(a)(4) of the Act (42 U.S.C. 1395w-23(a)(4))
generally describes the payment rule for FQHCs that provide services
to patients enrolled in MA plans that have an agreement with the
FQHC, including agreements required under 42 U.S.C. 1395w-27(e)(3).
---------------------------------------------------------------------------
4. Medicare Coverage Gap Discount Program
Section 3301 of ACA establishes the Medicare Coverage Gap Discount
Program, codified at section 1860D-14A of the Act. Under this program,
prescription drug manufacturers enter into an agreement with the
Secretary to provide certain beneficiaries access to discounts on drugs
at the point of sale.
Section 3301(d) of ACA amends the anti-kickback statute by adding a
new subparagraph (J) to section 1128B(b)(3) of the Act to protect the
discounts provided for under the Medicare Coverage Gap Discount
Program. To codify this self-implementing exception in our regulations,
this proposed rule would add a new paragraph (aa) to the existing safe
harbor regulations at 42 CFR 1001.952.
This new paragraph (aa) would protect a discount in the price of an
``applicable drug'' of a manufacturer that is furnished to an
``applicable beneficiary'' under the Medicare Coverage Gap Discount
Program under section 1860D-14A, as long as the manufacturer
participates in, and is in full compliance with all requirements of,
the Medicare Coverage Gap Discount Program. The proposed regulation
would incorporate by reference the following definitions of the terms
``applicable beneficiary'' and ``applicable drug'' which were added by
a new section 1860D-14A(g) of the Act:
Applicable beneficiary means an individual who, on the date of
dispensing a covered part D drug--
(A) is enrolled in a prescription drug plan or [a Medicare
Advantage Prescription Drug (MA-PD)] plan;
(B) is not enrolled in a qualified retiree prescription drug
plan;
(C) is not entitled to an income-related subsidy under section
1860D-14(a); and
(D) who--
(i) has reached or exceeded the initial coverage limit under
section 1860D-2(b)(3) during the year; and
(ii) has not incurred costs for covered part D drugs in the year
equal to the annual out-of-pocket threshold specified in section
1860D-2(b)(4)(B).
Applicable drug means, with respect to an applicable
beneficiary, a covered part D drug--
(A) approved under a new drug application under section 505(b)
of the Federal Food, Drug, and Cosmetic Act or, in the case of a
biologic product, licensed under section 351 of the Public Health
Service Act (other than a product licensed under subsection (k) of
such section 351); and
(B)(i) if the sponsor of the prescription drug plan or the MA
organization offering the MA-PD plan uses a formulary, which is on
the formulary of the prescription drug plan or MA-PD plan that the
applicable beneficiary is enrolled in;
(ii) if the [prescription drug plan (PDP)] sponsor of the
prescription drug plan or the MA organization offering the MA-PD
plan does not use a formulary, for which benefits are available
under the prescription drug plan or MA-PD plan that the applicable
beneficiary is enrolled in; or
(iii) is provided through an exception or appeal.
5. Local Transportation
Pursuant to our authority at section 1128B(b)(3)(E) of the Act, we
propose to establish a new safe harbor at 42 CFR 1001.952(bb) to
protect free or discounted local transportation services provided to
Federal health care program beneficiaries. We explored this issue in
the context of section 1128A(a)(5) in the past. According to the Act's
legislative history, in enacting section 1128A(a)(5) of the Act,
Congress intended that the statute not preclude the provision of
complimentary local transportation of nominal value (H.R. Conf. Rep.
No. 104-736 at 255 (1996)). We have interpreted ``nominal value'' to
mean no more than $10 per item or service or $50 in the aggregate over
the course of a year. (See 65 FR 24400, 24411; April 6, 2000.) As we
previously indicated, we were concerned that this interpretation may be
overly restrictive in the context of complimentary local
transportation.
[[Page 59722]]
Accordingly, we solicited public input on a number of issues as they
related to a possible exception to section 1128A(a)(5) of the Act (via
1128A(i)(6)) for complimentary local transportation. (67 FR 72892; Dec.
9, 2002) (2002 Solicitation). However, ultimately we did not propose or
finalize an exception for complimentary local transportation.
On the basis of our experience in the years since the 2002
Solicitation and our continued concern that our interpretation of
``nominal value'' in the context of complimentary local transportation
may be overly restrictive, we are proposing a safe harbor to the anti-
kickback statute to protect not only certain free local transportation
but also discounted local transportation that meets certain conditions.
As explained above, by operation of section 1128A(i)(6)(B), practices
permissible under the safe harbor would also be excepted from the
definition of ``remuneration'' in section 1128A(i)(6) of the Act.
The proposed safe harbor would protect free or discounted local
transportation made available to established patients (and, if needed,
a person to assist the patient) to obtain medically necessary items and
services. We also seek comments on a second format of transportation
that would be akin to a shuttle service. We are mindful that certain
types of entities may have legitimate financial and patient care
interests in the provision of local transportation to patients and that
such transportation could, depending on the circumstances, benefit
Federal health care programs through reduced costs and Federal
beneficiaries through better care, access, and convenience. In an
effort to foster these beneficial arrangements without permitting
arrangements that negatively impact beneficiaries or Federal health
care programs, the safe harbor would impose a number of conditions on
protected free or discounted local transportation services as set forth
below.
(1) We propose to require that the free or discounted local
transportation services be available only to established patients (as
described in greater detail below) and be determined in a manner
unrelated to the past or anticipated volume or value of Federal health
care program business. This requirement is intended to reduce the risk
that a health care provider or supplier could use a transportation
program for the purpose of increasing business by transporting patients
to its own premises or for the purpose of inappropriately inducing
referrals from other providers or suppliers by transporting patients to
theirs. We propose and solicit comments on a number of safeguards and
limitations related to this proposed condition.
(a) We propose that the safe harbor protect free or discounted
local transportation offered or provided by any individual or entity,
except as provided below (for purposes of this safe harbor, an
``Eligible Entity''), subject to meeting all proposed safeguards
herein. The term ``Eligible Entity'' in the proposed safe harbor would
not include individuals and entities (or family members or others
acting on their behalf) that primarily supply health care items
(including, but not limited to durable medical equipment (DME)
suppliers or pharmaceutical companies) because we believe that there
may be additional risk that these types of entities, which are heavily
dependent upon practitioner prescriptions and referrals, would use
transportation arrangements to generate business for themselves by
steering transported patients to those who order their products.
Moreover, these suppliers and manufacturers do not have the broader
patient care responsibilities that, for example, hospitals, health
systems, clinics, and physicians have, and thus they would seem to have
less need to engage in free or discounted local transportation
arrangements. We have similar concerns about the laboratory industry
even though laboratories furnish services rather than items. Thus, we
propose to exclude laboratories from the definition of ``Eligible
Entity'' and solicit comments on that proposal.
For the same and other reasons, we are considering and solicit
comments on whether certain other types of providers, suppliers of
services, or other entities should be excluded, completely or
partially, from protection as an Eligible Entity. In the context of
partially limiting protection as an Eligible Entity, we are considering
and seek comments on whether certain types of health care providers or
suppliers of services should not be protected when they provide free or
discounted local transportation to other health care providers or
suppliers who refer to them. For example, our oversight experience
suggests that overutilization may be occurring in the home health
industry. We are concerned that protecting the provision of free or
discounted local transportation by home health care providers to
physician offices that are actual or potential referral sources might
result in both steering (inducing the physician to refer to that
particular home health care provider) and overutilization in the form
of unnecessary physician visits or unnecessary home health care
prescriptions. To address this concern, we are considering excluding
home health care providers from safe harbor protection when they
furnish free or discounted local transportation to their referral
sources (but not excluding them from protection when they provide such
transportation to non-referral sources, such as pharmacies). We also
solicit comments on whether home health agencies should be excluded
from the definition of ``Eligible Entity'' entirely.
At this time, we propose that the safe harbor criteria apply
equally to all Eligible Entities offering the eligible forms of free or
discounted local transportation services. In addition to considering
whether to exclude certain types of providers or suppliers of services
from protection as described above, we are also considering and solicit
comments on whether there should be additional safeguards depending on
the type of Eligible Entity offering the transportation services and,
if so, what types of safeguards could be included to protect beneficial
free or discounted local transportation arrangements while at the same
time preventing abuses, such as overutilization, improper patient
steering, or use of free or discounted local transportation to generate
referrals, either referrals initiated by the transported patient or
referrals from providers and others to whom the patients are
transported.
(b) We propose and solicit comments on limiting safe harbor
protection to free or discounted local transportation offered to
established patients. Thus, for example, once a patient has selected an
oncology practice and has attended an appointment with a physician in
the group, the physician could offer transportation assistance to the
patient who might have trouble reliably attending appointments for
chemotherapy. However, safe harbor protection would not be available to
a practice that offers or provides free or discounted transportation to
new patients.
(c) We propose to allow free or discounted local transportation
services to the premises of a health care provider or supplier, subject
to certain limitations that we believe would reduce the risk of using
the transportation services to increase referrals. First, the safe
harbor would not protect free or discounted local transportation that
an Eligible Entity makes available only to patients who were referred
to it by particular health care providers or suppliers. Likewise, the
safe harbor would not protect an offer of transportation that is
contingent
[[Page 59723]]
on a patient's seeing particular providers or suppliers who may be
referral sources for the Eligible Entity offering the transportation.
These restrictions would not prohibit Eligible Entities from setting
limitations on the furnishing of free or discounted local
transportation, but they would require that the limitations be
unrelated to the volume or value of referrals. For example, a hospital
could place a limit of 10 miles or a limit on the number of trips on
its offer to transport a patient to another health care provider or
supplier for the purpose of obtaining items or services necessary to
avoid hospital readmissions. It could not, however, limit the offer of
transportation to patients who receive these items or services from the
hospital's referral sources. We are considering and seek comments on
any additional safeguards that would be required to limit the risk of
fraud and abuse associated with one health care provider or supplier
providing transportation to the premises of another, as well as on
whether one provider or supplier of services should be permitted to
provide free or discounted local transportation to the premises of
others at all. For example, if the safe harbor is to cover
transportation provided by one health care provider to the premises of
another, should it be required that the patient be an established
patient of the provider or supplier to which the patient would be
transported, as well as an established patient of the Eligible Entity
offering the transportation? We also recognize that health systems,
health plans, accountable care organizations, or other integrated
networks of providers and suppliers might be Eligible Entities and
might seek to establish a free or discounted local transportation
program only among providers and suppliers within the system or
network. We seek comments on the impact on those potential programs if
we include, as conditions of safe harbor protection, the restrictions
on offers of transportation set forth in this section. We are
considering whether, and if so, how, the safe harbor conditions should
be modified to account for differences that may exist when these kinds
of entities provide free or discounted local transportation. We are
also considering whether, for these kinds of entities, safe harbor
protection should apply only to free or discounted local transportation
provided to destinations that are participating or network providers or
suppliers; conversely, we are considering whether such entities should
be permitted or required to provide free or discounted local
transportation to non-network or non-participating providers or
suppliers and, if so, under what conditions. Finally, if we were to
have different standards applicable to entities that do not directly
furnish health care services, we are interested in comments suggesting
safeguards to prevent abuses such as overutilization, improper patient
steering, and increased costs.
(d) We also propose to require that the offer or granting of free
or discounted local transportation services not be based on the type of
treatment a patient might receive. Under the proposed safe harbor, an
Eligible Entity would be permitted to restrict offers of free or
discounted local transportation to patients whose conditions require
frequent or critical (e.g., follow-up testing for a drug that has the
potential for serious side effects) appointments, but who do not have
reliable transportation. In practice, this means that a free or
discounted local transportation offer might be restricted to patients
with chronic conditions, or even, in some circumstances, to patients
with a specific illness. However, limiting offers of transportation to
patients who have been prescribed expensive treatments that are
lucrative for the Eligible Entity offering the transportation (or a
referral source, parent company, subsidiary, or other affiliated entity
of the Eligible Entity) would not be protected. For example, an
oncology group that offered an expensive radiation treatment in its
office could not restrict its offers of transportation to patients who
require the lucrative radiation treatments. The group could, however,
offer transportation to patients who require frequent appointments to
monitor their condition, even if some of those patients also would
receive the radiation treatment. We solicit comments on this proposal.
(e) In addition, we are considering and seek comments on whether to
require Eligible Entities to maintain documented beneficiary
eligibility criteria, such as a requirement that the patient show
transportation need or financial need or that the transportation
assistance would address risks associated with failure to comply with a
treatment regimen. Offering transportation to patients solely on the
basis of number of appointments, without regard to transportation need,
raises the possibility that the offer might be based upon the volume of
Federal health care program business and thus would not be protected.
(f) Finally, we are considering and solicit comments on whether
Eligible Entities should be limited for purposes of safe harbor
protection to providing transportation for medical purposes or if
Eligible Entities should also be protected under the safe harbor if
they provide free or discounted local transportation for other purposes
that relate to the patient's health care (e.g., to apply for government
benefits, to obtain counseling or other social services, or to get to
food banks or food stores). We would not protect transportation for
purposes wholly unrelated to health care, such as transportation to
entertainment or sporting events. We note, however, that the anti-
kickback statute prohibits offering or providing remuneration to induce
referrals for or receiving items or services paid for by Federal health
care programs. The provision of transportation for non-medical
purposes, even by a provider or supplier of health care services, would
not necessarily violate the statute, depending on the facts and
circumstances. For example, a hospital could potentially sponsor
shuttle service between a housing complex and a grocery store without
running afoul of the statute, if the service were available to all
residents of the complex regardless of whether they were or would
become patients of the hospital.
We are considering and solicit comments on whether the safe harbor
should separately protect transportation supplied by an Eligible
Entity, such as a hospital, in the form of bus or van service on
regular routes that include neighborhoods served by the hospital,
public transportation stops, and the hospital campus or other locations
where referring physicians have offices. If we were to protect this
type of transportation, protection would not necessarily be limited to
established patients of an Eligible Entity. We recognize that certain
communities may have a need for this type of service, but we also
recognize that such a service presents opportunities for fraud and
abuse. Thus, we solicit comments not simply on whether this type of
service would be useful but also on what additional safeguards we could
include to reduce the risk that Eligible Entities would use this
service to bring in patients for unnecessary services, leading to
overutilization or compromised quality of care.
(2) We propose to limit the form of transportation by excluding
from safe harbor protection air, luxury (e.g., limousine), and
ambulance-level transportation.
(3) We propose and solicit comments on the following limitations,
which would be designed to exclude from
[[Page 59724]]
protection transportation that is, in reality, a means for providers
and suppliers to pay for recruitment of patients. First, we propose to
exclude from safe harbor protection transportation services that are
publicly advertised or marketed to patients or others who are potential
referral sources. Second, we propose that the safe harbor would not
apply if Eligible Entities were to pay drivers or others involved in
arranging the transportation on a per-beneficiary transported basis,
rather than, for example, on an hourly or mileage basis. Third, no safe
harbor protection would be available if marketing of health care items
and services occurred during the course of the transportation. For
purposes of this safe harbor condition, we would not consider signage
on the vehicle designating the source of the transportation (e.g., the
name of the hospital) to be ``marketing.''
(4) We propose to protect only local transportation services
provided: (a) To the patient and, if needed, a family member or other
person to assist the patient, to obtain medically necessary items or
services and (b) within the local area of the health care provider or
supplier to which the patient would be transported. We propose
permitting the free or discounted local transportation to be extended
to a family member, a friend, or other person involved in the patient's
care. We recognize that it may be beneficial or necessary in some
circumstances for the patient to be accompanied by another person, and
we do not view this extension as increasing the risk of fraud and
abuse. We do not intend to require that the need for a patient
companion be documented, nor do we intend that transportation of a
patient companion be required for the proposed safe harbor to apply to
transportation of the patient.
Finally, we propose to limit the safe harbor to local
transportation. In the interest of providing clear guidance, we propose
that if the distance that the patient would be transported is no more
than 25 miles, then the transportation would be deemed to be local. We
solicit comments on whether 25 miles is an appropriate distance for
this deeming provision. We also solicit comments on whether 25 miles
should be a fixed limitation rather than a distance ``deemed'' to
comply with the safe harbor.\9\
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\9\ If 25 miles is a fixed limitation, nothing beyond that
distance would be ``local'' under the safe harbor, unless the final
rule includes alternate tests. If 25 miles is deemed to be local, an
Eligible Entity could still comply with the ``local'' requirement
beyond 25 miles under appropriate facts and circumstances.
---------------------------------------------------------------------------
We recognize that a distance-based test is not a one-size-fits-all
solution. Therefore, we are considering and seek comments on other
reasonable methods for interpreting the term ``local'' either alone or
in combination with the 25-mile deeming provision. For example, we are
considering and solicit comments on:
Whether to allow a more expansive service area for
patients who reside in rural or underserved areas, and if so, what the
appropriate test should be and if ``rural'' or ``underserved'' should
be defined;
[cir] If we were to include definitions, we solicit comments on:
(1) Defining ``underserved'' as being located either in a Health
Professional Shortage Area or a Medically Underserved Area; and (2)
using the definition of ``rural'' accepted by the Office of Rural
Health Policy (i.e., all counties outside a Metropolitan Statistical
Area (MSA), plus counties within MSAs with Rural-Urban Commuting Codes
4-10). We also solicit comments on alternate definitions for these
terms;
[cir] If we were to deem a greater distance to be ``local'' in
rural or underserved areas, we solicit comments on expanding the
distance to 35 miles or to the nearest facility capable of providing
medically necessary items and services, whichever is greater;
whether to permit free or discounted local transportation
to the nearest facility capable of providing medically necessary items
and services, even if the beneficiary resides farther away than the
proposed mileage limits would otherwise allow;
whether travel time might be more appropriate than a
distance-based method;
whether the general approach used in the regulations
governing exceptions to the self-referral prohibition related to
compensation arrangements regarding ``geographic area served by the
hospital,'' which uses a calculation based on the contiguous ZIP Codes
from which hospitals draw at least 75 percent of their inpatients (see
42 CFR 411.357(e)(2)), would be useful; and
whether a more general approach, such as transportation
offered to patients within the primary service area of the provider or
supplier (or other location) to which the patient would be transported,
would be appropriate.
We solicit comments on all of these possible approaches, and we will
consider alternative suggestions as well.
(5) We propose requiring the Eligible Entity that makes the
transportation available to bear the costs of the free or discounted
local transportation services and not shift the burden of these costs
onto Medicare, a State health care program, other payers, or
individuals. Moreover, safe harbor protection would not be available if
the Eligible Entity providing the transportation and the destination
provider or supplier had any referral agreement tied to the
transportation. For example, if an ambulance supplier had an agreement
with a hospital to provide certain free transports to hospital
outpatients (e.g., via van service) in exchange for receiving the
hospital's transports that are payable by Medicare Part B, the free
transportation would not be protected.
B. Civil Monetary Penalty Authorities
This proposed rule would amend 42 CFR Part 1003 in two ways. First,
we propose to amend the definition of ``remuneration'' related to the
beneficiary inducements CMP to: (a) Add a self-implementing exception
that was enacted in BBA of 1997 but was never codified in our
regulations; and (b) codify amendments that were enacted in ACA.
Second, we propose to codify in our regulations the Gainsharing CMP by
interpreting terms used in that statute and adding a definition of
``hospital'' to the regulations.
1. Beneficiary Inducements CMP
This proposed rule would add exceptions to the regulations at Part
1003 addressing the civil monetary penalties prohibition against
offering inducements to Medicare or Medicaid beneficiaries that the
offeror knows or should know are likely to influence the selection of
particular providers, practitioners or suppliers.\10\ As we explained
in footnote 2 above, one exception to the definition of
``remuneration'' for purposes of the beneficiary inducements CMP
incorporates exceptions to the anti-kickback statute and the safe
harbor regulations. However, no parallel exception exists in the anti-
kickback statute. Thus, the exceptions in section 1128A(i)(6) of the
Act apply only to the definition of ``remuneration'' applicable to
section 1128A.
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\10\ For additional background on this provision, see 65 FR
24400 (Apr. 26, 2000).
---------------------------------------------------------------------------
Section 4523 of the BBA of 1997 added section 1833(t)(5)(B) of the
Act, which required the Secretary to establish a procedure to permit
hospitals to elect to reduce copayment amounts for some or all covered
hospital outpatient department (OPD) services (as defined in section
1833(t)(1)(B)) to no less than 20 percent of the Medicare OPD fee
schedule
[[Page 59725]]
amount. The Secretary established the required procedures at 42 CFR
419.42.
Section 4523 of the BBA of 1997 also added subsection (D) to the
definition of ``remuneration'' at section 1128A(i)(6) of the Act. That
subsection, which was subsequently redesignated subsection (E),
excluded from the definition of ``remuneration'' ``a reduction in the
copayment amount for covered OPD services under section 1833(t)(5)(B)
[of the Act].'' Id. Subsequent to the BBA of 1997, sections 201(a) and
202(a) of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement
Act of 1999 (106 Pub. L. 113) redesignated subsection 1833(t)(5) as
section 1833(t)(8). A corresponding change to the reference at
1128A(i)(6)(E) was not made. We propose to codify the exception to the
definition of ``remuneration'' at 1128A(i)(6)(E) in our regulations at
proposed 42 CFR 1003.110 (current Sec. 1003.101). We propose to adopt
language identical to the statutory language, except that we propose to
change the reference from 1883(t)(5)(B) to 1883(t)(8)(B) to reflect the
redesignation of the originally referenced subsection. We believe that
our proposed change is consistent with congressional intent and merely
addresses an inadvertent oversight. We solicit comments on this
proposal.
Section 6402(d)(2)(B) of ACA amends the statutory definition of
``remuneration'' at section 1128A(i)(6) of the Act by adding four new
subparagraphs, (F)-(I), protecting certain charitable and other
programs. We propose to amend the definition of ``remuneration'' in the
regulations to include the new statutory exceptions. We believe these
exceptions are intended to protect certain arrangements that offer
beneficiaries incentives to engage in their wellness or treatment
regimens or that improve or increase beneficiary access to care,
including better care coordination. However, in structuring the
proposals, we are also mindful of the significant potential for abusive
arrangements that offer vulnerable beneficiaries (or, in some cases,
cooperating beneficiaries) remuneration, whether in cash or in kind, to
induce them to obtain items or services billable to Medicare or
Medicaid that may be unnecessary, too expensive, or of poor quality.
The proposals set forth below aim to ensure that additional protections
offered for arrangements that benefit patient care do not lead to such
abuses.
Promotes Access/Low Risk of Harm
The first new exception to the definition of ``remuneration,''
added at section 1128A(i)(6)(F) of the Act, protects ``any other
remuneration which promotes access to care and poses a low risk of harm
to patients and Federal health care programs (as defined in section
1128B(f) and designated by the Secretary under regulations).''
For purposes of this exception, we propose that the phrase
``promotes access to care'' mean that the remuneration provided
improves a particular beneficiary's ability to obtain medically
necessary health care items and services. We solicit comments on
whether this phrase should be interpreted more broadly, particularly in
light of the movement towards coordinated or integrated care
arrangements that depend, in part, on patient engagement. For example,
we are considering whether to interpret ``promotes access to care'' to
include encouraging patients to access care, supporting or helping
patients to access care, or making access to care more convenient for
patients than it would otherwise be. We request that any such comments
include specific examples of remuneration that would promote access to
care under a broader definition that would not be included within the
proposed interpretation above. When providing examples, we request that
commenters bear in mind that not all forms of remuneration provided to
beneficiaries would be prohibited by the beneficiary inducements CMP.
The beneficiary inducements CMP applies only to remuneration that the
donor ``knows or should know is likely to influence [the recipient] to
order or receive from a particular provider, practitioner, or supplier
any item or service for which payment may be made'' by Medicare or
Medicaid. Thus, remuneration that is not likely to influence a
beneficiary to order or receive federally reimbursable items or
services from a particular provider, practitioner, or supplier need not
meet the conditions of this or any other exception.
We are also considering, and soliciting comments on, whether the
test for the exception should be that the remuneration would promote
access to care for a particular beneficiary or whether the exception
should also apply to remuneration that promotes access to care for a
defined beneficiary population generally, such as, by way of example,
beneficiaries in a designated care network or beneficiaries being
treated under a designated care protocol. Finally, we are considering,
and soliciting comment on, whether we should more broadly interpret
``access to care'' to include care that is non-clinical but reasonably
related to the patient's medical care, such as social services.
We propose to interpret the phrase ``low risk of harm to Medicare
and Medicaid beneficiaries and the Medicare and Medicaid programs'' as
meaning that the remuneration: (1) Is unlikely to interfere with, or
skew, clinical decision-making; (2) is unlikely to increase costs to
Federal health care programs or beneficiaries through overutilization
or inappropriate utilization; and (3) does not raise patient-safety or
quality-of-care concerns.
While some forms of remuneration covered by the prohibition at
section 1128A(a)(5) of the Act may promote access to care and some
forms may pose a low risk of harm to Medicare and Medicaid
beneficiaries and the programs, the amendment to the statute applies
only to forms of otherwise prohibited remuneration that meet both of
these standards. By way of example, through our advisory opinion
process, we have examined and approved arrangements that meet both
requirements. In these arrangements, certain hospitals provide lodging
assistance to patients and their families when the assistance was
necessary for the patient to obtain appropriate care. Because of the
specialized nature of these hospitals, the lodging programs were
unlikely to steer patients to those particular hospitals, and the costs
were not passed on to Federal programs. Yet, the programs enabled
patients to get treatment that they might not otherwise have been able
to access because of logistical hurdles. See OIG Advisory Opinion Nos.
11-01 and 11-16. Similarly, we believe that giving items that are
necessary for patients to record and report health data, such as blood
pressure cuffs or scales, to beneficiaries who could benefit from close
monitoring of their blood pressure or weight, promotes access to care,
because the recording and reporting of health data increase their
ability to obtain medically necessary care and pose a low risk of harm
to patients and Federal programs as long as receipt of the items is not
conditioned on the patient obtaining other items or services from a
particular provider or supplier.
However, not every program that benefits patients would meet the
terms of this exception. We continue to believe that offering valuable
gifts to beneficiaries in connection with direct or indirect marketing
activities is not low risk to beneficiaries or to the Medicare and
Medicaid programs. In addition, we are concerned that rewards offered
by providers or suppliers to patients purportedly for compliance
[[Page 59726]]
with a treatment regimen pose a risk of abuse, in cases when the
offerors know or should know that the rewards are likely to influence
the recipients to order or receive from a particular source items or
services paid for by Medicare or Medicaid. For example, patients might
seek or agree to seek unnecessary or poor quality care to obtain the
rewards, or providers and suppliers might order or seek orders for
additional items or services to recoup the costs of giving the rewards.
In either case, such rewards would not be low risk for patients and/or
Federal health care programs.
While we are concerned about the significant potential for abuse
when patients are offered rewards to induce them to receive items or
services, we are also aware that, in some circumstances, patients might
be offered incentives to encourage them to engage in arrangements that
lower health care costs (without compromising quality) or that promote
their own wellness and health care, for example, by participating fully
in appropriate prescribed treatment, achieving appropriate treatment
milestones, or following up with medically necessary appointments. We
seek comments on whether otherwise prohibited incentives for compliance
with treatment regimens should be permitted under this exception and if
so, what limitations or safeguards should be required. For example,
should the incentives be subject to specific dollar value limits?
Should providers or suppliers offering the incentives be required to
document the milestones reached to earn the incentives? Should the form
of the incentive be required to bear a reasonable connection to the
medical care? Are there quality or performance metrics or monitoring
mechanisms that, if required for safe harbor compliance, would help
ensure that protected patient incentives are not used to facilitate
abusive arrangements that increase costs or compromise quality? Are
there different considerations if the offeror of the incentive is at
risk, in whole or in part (or directly or indirectly) for the treatment
that the incentive is intended to encourage (e.g., if the offeror is a
risk-bearing accountable care organization, medical home, or health
plan; a hospital subject to readmissions penalties; or a provider
reimbursed under a bundled payment arrangement that includes some or
all of the incentivized treatment)?
We recognize that the Department is undertaking a number of
initiatives and demonstration programs with the goal of encouraging
better care and better health at lower costs through innovative means,
some of which could involve providing incentives to beneficiaries.
These programs include, for example, a variety of permanent and
demonstration programs testing accountable care organizations, medical
homes, bundled payments, coordinated care programs, and other
initiatives to improve the quality of care and reduce costs. Some
participants in particular CMS models, such as the Bundled Payment for
Care Initiative, may have waivers of the CMP for certain arrangements
undertaken as part of the applicable CMS model.\11\ With respect to CMS
programs or models to which a waiver does not apply, we are considering
whether to make a special provision in this rule for incentives offered
by participants to beneficiaries covered by those programs. Many of
these programs have safeguards built into their structures. For
example, CMS reviews and monitors these programs, beginning with an
application process, continuing through the development and
implementation phases, and including a final assessment of the overall
impact of the program on cost and quality of care. Because incentives
offered to beneficiaries to foster patient engagement outside the
auspices of such a CMS program are not subject to this oversight, we
would not necessarily consider that remuneration (if otherwise
prohibited by the beneficiary inducements CMP) to be low risk, unless
it met the same safeguards that we finalize in connection with this
proposed rule.
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\11\ Nothing in this proposed rule would change the application
of existing waivers. It is possible that a final exception, as
proposed here, might offer additional protection for participants in
programs that have such a waiver.
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We are also soliciting comments on other types of remuneration to
beneficiaries not mentioned in this preamble that both promote access
to care and pose a low risk of harm to Medicare and Medicaid
beneficiaries and the Medicare and Medicaid programs, to inform our
development of regulatory text for this exception. We are not providing
regulatory text at this time, but we solicit proposals for language,
including specific examples of the types of remuneration to
beneficiaries, that would implement the principles described above.
Retailer Rewards Programs
Section 6402(d)(2)(B) of ACA adds the following exception as new
section 1128A(i)(6)(G) of the Act:
The offer or transfer of items or services for free or less than
fair market value by a person, if--
(i) the items or services consist of coupons, rebates, or other
rewards from a retailer;
(ii) the items or services are offered or transferred on equal
terms available to the general public, regardless of health
insurance status; and
(iii) the offer or transfer of the items or services is not tied
to the provision of other items or services reimbursed in whole or
in part by the program under title XVIII or a State health care
program (as defined in section 1128(h)).
This exception concerns retailer rewards programs. We are aware
that this genre of program has proliferated in recent years at grocery
stores, drug stores, ``big-box,'' and other retailers. Although these
retailer rewards programs vary in design, in general most attempt to
incentivize and reward customer loyalty by providing benefits to
shoppers. Many retailers offering such programs have pharmacies that
sell items or services reimbursable by Federal health care programs.
OIG has interpreted the prohibition on offering gifts and other
inducements to beneficiaries as permitting Medicare or Medicaid
providers generally to offer beneficiaries inexpensive gifts or
services (other than cash or cash equivalents) without violating the
statute. For enforcement purposes, we have considered inexpensive gifts
or services to be those that have a retail value of no more than $10
individually and no more than $50 in the aggregate annually per
patient.\12\ Notwithstanding this interpretation, we understand that
many retailer reward programs have included a blanket exclusion of
Federal health care program beneficiaries. Against this backdrop, we
believe this new exception should increase retailers' willingness to
include Federal health care program beneficiaries in their reward
programs in appropriate circumstances.
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\12\ See Special Advisory Bulletin: Offering Gifts and Other
Inducements to Beneficiaries, available at https://oig.hhs.gov/fraud/docs/alertsandbulletins/SABGiftsandInducements.pdf.
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Section 6402(d)(2)(B) of ACA excludes from the definition of
``remuneration'' rewards pursuant to a retailer rewards program that
meet three criteria. The first criterion provides that the free or
less-than-fair-market-value items or services must ``consist of
coupons, rebates, or other rewards from a retailer.'' We propose to
interpret these terms as follows. We interpret a ``coupon'' as
something authorizing a discount on merchandise or services. For
instance, if Alpha Store's rewards program mails its customers a flyer
offering 20 percent off the purchase price of any item in the store,
the flyer would be considered a coupon. Another example of a coupon
would be a ``buy one get one free'' reward. We propose to
[[Page 59727]]
interpret ``rebate'' as a return on part of a payment. For example, if
Beta Store's retailer reward program consisted of returning to
customers a store credit equal to 1 percent of the total money the
customer spent out-of-pocket at the retailer during the previous
calendar year, it would constitute a rebate. In no event, however,
could a retailer ``rebate'' an amount that exceeds what the customer
spent at the store. We propose to interpret ``other rewards'' primarily
as describing free items or services, such as store merchandise,
gasoline, frequent flyer miles, etc. Finally, we interpret ``retailer''
as having its usual meaning, i.e., an entity that sells items directly
to consumers. We note, however, that individuals or entities that
primarily provide services (e.g., hospitals or physicians) would not be
considered ``retailers.'' We are considering and solicit comments on
whether entities that primarily sell items that require a prescription
(e.g., medical equipment stores) should be considered ``retailers.''
The second criterion requires that the items or services be offered
or transferred on equal terms to the public, regardless of health
insurance status. We propose to interpret this requirement consistent
with OIG's longstanding concern that providers and suppliers of items
or services reimbursable in whole or in part by Federal health care
programs not discriminate against (``lemon drop'')--or, conversely,
``cherry pick''--certain patients on the basis of health insurance
status. For example, we do not believe that a retailer that targets its
rewards program to Medicare beneficiaries only would meet this
criterion. On the other hand, if a retailer mailed a coupon for $10 off
the next purchase of any item in its store, including prescriptions, to
every resident in the surrounding ZIP Code, such a promotion likely
would be in compliance with this provision because the coupon would be
offered on equal terms to everyone in the ZIP Code, without regard to
health insurance status.
The third criterion requires that the offer or transfer of the
items or services not be tied to the provision of other items or
services reimbursed in whole or in part by Medicare or an applicable
State health care program. We believe that the objective of this
criterion is to attenuate any connection between federally payable
items and services and a loyalty program's rewards; this attenuation
should be present both in the manner in which a reward is earned and in
the manner in which the reward is redeemed, as explained further below.
We do not interpret the prohibition on tying the free or below-market
items and services to federally reimbursable services as requiring a
complete severance of the offer from the medical care of the
individual. At the front end of a transaction (``earning'' the reward),
the reward should not be conditioned on the purchase of goods or
services reimbursed in whole or in part by a Federal health care
program and should not treat federally reimbursable items and services
in a manner that is different from that in which non-reimbursable items
and services are treated. For instance, a drugstore program that
offered a $20 coupon to customers, including Medicare beneficiaries,
who transferred their prescriptions to the drugstore would not meet
this criterion because the $20 coupon would be tied to the drugstore's
getting the recipients' Medicare Part D prescription drug business. On
the other hand, a program that awarded a $20 coupon once a customer
spent $1,000 out-of-pocket in the store--even if a portion of that
$1,000 included copayments for prescription drugs--would likely meet
the criterion. We also believe that this attenuation must be present on
the ``redeeming'' end of the transaction and therefore interpret it to
exclude from protection rewards programs in which the rewards
themselves are items or services reimbursed in whole or in part by a
Federal health care program. Thus, if Epsilon Store allowed its
customers to redeem reward points only for cost-sharing (i.e., the
customer's out-of-pocket costs) on DME, prescription drugs, or other
federally payable items or services, that program would not meet this
criterion. On the other hand, if the $10 coupon referenced in the first
example could be redeemed on anything purchased in the store, including
the customer's out-of-pocket costs for federally reimbursable items,
the coupon could meet the terms of the exception.
Financial-Need-Based Exception
A third new statutory provision, added at 1128A(i)(6)(H) of the
Act, excepts from the definition of ``remuneration'' the offer or
transfer of items or services for free or at less than fair market
value after a determination that the recipient is in financial need and
meets certain other criteria.
We begin our consideration of this new provision by noting that it
concerns ``the offer or transfer of items or services.'' The term
``items or services'' does not include cash or instruments convertible
to cash. This interpretation is consistent with our interpretation of
``permissible incentives for preventive care'' under section
1128A(i)(6)(D), as explained in the preamble to that final rule (``we
are excluding from the scope of permissible exceptions cash and
instruments convertible to cash'' (65 FR 24400, 24409 (Apr. 26, 2000)).
Other proposed limits on what may be transferred are discussed in the
paragraphs below.
The statute provides that protected items or services may not be
offered as part of any advertisement or solicitation. We are including
this requirement in our proposed regulation.
The second statutory criterion is that ``the items or services are
not tied to the provision of other services reimbursed in whole or in
part by the program under title XVIII or a State health care program. .
. .'' To interpret this criterion in a meaningful way, it is necessary
to consider it together with the next requirement, which is that there
must be a reasonable connection between the items or services and the
medical care of the individual. Each requirement is discussed in more
detail below.
To be protected under the statute, the item or service being
offered or transferred must not be tied to the provision of other
reimbursed services. Consistent with our interpretation of the same
criterion described in connection with the exception for retailer
rewards programs described above, we do not interpret the prohibition
on tying the free or below-market items and services to services
reimbursable by Medicare or Medicaid as requiring a complete severance
of the offer from the medical care of the individual. However, a
provider's conditioning the offer or transfer of items or services on
the patient's use of other services from the provider that would be
reimbursed by Medicare or Medicaid would violate this requirement. For
example, we interpret this criterion to exclude from protection offers
by providers of lodging or transportation to receive a particular
service from the provider.\13\ We solicit comments on this
interpretation.
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\13\ As explained above, we have approved lodging and
transportation assistance programs through our advisory opinion
process. However, we found that the programs were consistent with
the exception to the definition of ``remuneration'' for programs
that promote access to care and pose a low risk of harm to patients
and Federal health care program beneficiaries.
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The third statutory requirement is that there ``is a reasonable
connection between the items or services and the medical care of the
individual.'' We must interpret this requirement in the context of this
particular exception. This exception is designed to help financially
needy individuals access items or services related to their medical
[[Page 59728]]
care; unlike the preventive care exception referenced above, this
exception is not designed to induce the patient to seek additional
care.
For purposes of this requirement, we interpret ``medical care'' to
refer to the treatment and management of illness or injury and the
preservation of health through services offered by the medical, dental,
pharmacy, nursing, and allied health professions. Consistent with the
statutory language, our proposed regulation would require a
``reasonable connection'' between the remuneration and the patient's
medical care. Whether a ``reasonable connection'' exists depends on a
situation's specific facts and circumstances. In particular, this
requirement warrants a dual consideration: Whether a reasonable
connection exists from a medical perspective and whether a reasonable
connection exists from a financial perspective. A reasonable connection
exists from a medical perspective when the items or services would
benefit or advance identifiable medical care or treatment that the
individual patient is receiving. From a financial perspective,
remuneration disproportionately large compared with the medical
benefits conferred on the individual patient would not have a
reasonable connection to the patient's medical care. Such remuneration
gives rise to an inference that at least part of the transfer is being
provided to induce beneficiaries to obtain additional services, and
such remuneration would not be covered by the Financial-Need-Based
Exception.
Examples of transfers of items or services that, in context, might
qualify as reasonably connected to medical care include:
Distribution of protective helmets and safety gear to
hemophiliac children;
distribution of pagers to alert patients with chronic
medical conditions to take their drugs;
provision of free blood pressure checks to hypertensive
patients;
distribution of free nutritional supplements to
malnourished patients with end-stage renal disease (ESRD); and
provision of air conditioners to asthmatic patients.
However, in another context, these same items and services would
not likely qualify as reasonably connected to an individual patient's
medical care. Most obviously, these would include transfers of items or
services to an individual for whom they were not medically indicated.
We are considering and seek comments, however, on the boundaries of the
concept of ``medically indicated.'' For example, should a hospital be
permitted to provide free bicycle helmets or other child safety devices
to financially needy families when children are treated for injuries in
the emergency department? We use this example, which arguably is not
related to ``care,'' in order to inform comments on the limits of the
``reasonable connection to care'' requirement.
From a financial perspective, transfers of items or services of
disproportionately large value compared with their medical benefit for
the individual patient would not qualify. For example, transfer to a
diabetic patient of a smartphone preloaded with an ``app'' relating to
management of blood sugar levels would not likely qualify, while an
offer to the diabetic patient of only a complimentary download of the
app onto his or her own smartphone might.
We are considering whether we can (and, if so, whether we should)
identify specific conditions under which remuneration would be deemed
to be ``reasonably connected'' to the patient's medical care, and we
solicit suggestions for possible conditions. For example, one condition
we are considering is whether the patient's physician or other health
care professional has concluded that the items or services would
benefit the individual patient's treatment. Another possible condition
is whether, absent the transfer of needed health care items or
services, the patient would otherwise be expected to lack access to
them for reasons including lack of payment resources; lack of
appropriate health care facilities in the patient's community or the
surrounding areas; and unique physical, behavioral, or mental health
issues that might interfere with the patient's ability to otherwise
obtain access. Such circumstances in a patient's case would support the
argument for a reasonable connection. We solicit comments about what
additional or alternative factors should be considered, if any, in the
determination of a reasonable connection between items or services
offered or transferred and the medical care of the individual.
The fourth and final statutory requirement is that the items or
services may be provided only ``after determining in good faith that
the individual is in financial need.'' We propose to interpret this
provision as requiring an individualized assessment of the patient's
financial need on a case-by-case basis. Moreover, the assessment must
be conducted in good faith. We believe, among other things, that a good
faith assessment requires the use of a reasonable set of income
guidelines, uniformly applied. This reasonable set of financial need
guidelines should be based on objective criteria and be appropriate for
the applicable locality. Under our proposal, ``financial need'' would
not be limited to ``indigence,'' but could include any reasonable
measure of financial hardship. What constitutes a good faith
determination of ``financial need'' may vary depending on the
individual patient's circumstances; the individual or entity offering
the items or services should have flexibility to consider relevant
variables. We are considering whether we have authority to require
documentation of the financial need assessment as a condition of the
exception. Regardless, it would be prudent for those seeking protection
under the proposed exception to maintain accurate and contemporaneous
documentation of the need assessment and the criteria applied.
Waivers of Cost-Sharing for the First Fill of a Generic Drug
The fourth new provision added at section 1128A(i)(6)(I) of the Act
excepts from the definition of ``remuneration'' waivers by a PDP
sponsor of a Part D plan or MA organization offering MA-PD plans of any
copayment that would be otherwise owed by their enrollees for the first
fill of a covered Part D drug that is a generic drug. Section
6402(d)(2)(B) of ACA does not define the term ``generic drug,'' so we
propose to rely on the definition in the Part D regulations at 42 CFR
423.4.
The type of waiver described in the statute is designed to minimize
drug costs by encouraging the use of lower cost generic drugs. To
implement this waiver, we propose interpreting this statutory provision
consistently with current CMS guidance. Thus, sponsors desiring to
offer these waivers to their enrollees would be required to disclose
this incentive program in their benefit plan package submissions to
CMS. We propose to include this requirement both to ensure consistency
with current CMS practice and to ensure transparency to beneficiaries
when they select Part D or MA plans. We propose to make this exception
effective for coverage years beginning after publication of the final
rule. We note, however, that CMS already permits these waivers as part
of Part D and MA plan benefit designs. Although this proposed
regulation will not be effective until a future date, we will not
exercise our enforcement authority against plans complying with CMS
requirements for these waivers in the interim.
2. Gainsharing
The Gainsharing CMP is a self-implementing law that prohibits
[[Page 59729]]
hospitals and critical access hospitals from knowingly paying a
physician to induce the physician to reduce or limit services provided
to Medicare or Medicaid beneficiaries who are under the physician's
direct care. We proposed regulations in 1994 to interpret the
Gainsharing CMP (59 FR 61571 (Dec. 1, 1994)), but the proposed rule was
not finalized. In July 1999, we published a Special Advisory Bulletin
titled ``Gainsharing Arrangements and CMPs for Hospital Payments to
Physicians to Reduce or Limit Services to Beneficiaries'' (the
Gainsharing SAB), available at: https://oig.hhs.gov/fraud/docs/alertsandbulletins/gainsh.htm. In the Gainsharing SAB, we explained
that the Gainsharing CMP is broad and prohibits any hospital incentive
plan that involves payments to physicians to encourage reductions or
limitations in items or services provided to patients under the
physicians' clinical care. We observed that the statute does not limit
this prohibition to reductions or limitations of medically necessary
items or services.
We have previously observed that not all changes in practice
necessarily constitute a reduction of services. Health care payment and
delivery systems are changing, with greater emphasis on accountability
for providing high quality care at lower costs. We propose to codify
the Gainsharing CMP in our regulations and interpret certain provisions
in a manner that reflects today's health care landscape.
OIG has recognized that gainsharing can be beneficial. In fact, we
have approved 16 gainsharing arrangements through our advisory opinion
process.\14\ We found that the particular facts presented to us in
those arrangements presented few risks relative to those of other
gainsharing arrangements. The gainsharing programs in the advisory
opinions set out specific actions to be taken and tied remuneration to
the actual cost savings attributable to the arrangements. They included
specific safeguards against patient and program abuse.
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\14\ OIG Advisory Opinion Nos.: 00-02, 01-01, 05-01, 05-02, 05-
03, 05-04, 05-05, 05-06, 06-22, 07-21, 07-22, 08-09, 08-15, 08-21,
09-06, 12-22.
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Citing to many of these advisory opinions, the Medicare Payment
Advisory Commission (MedPAC) recommended that Congress authorize the
Secretary to allow gainsharing arrangements and to regulate those
arrangements to protect the quality of care and minimize financial
incentives that could influence physician referrals. See MedPAC, Report
to the Congress: Physician-Owned Specialty Hospitals (March 2005)
(MedPAC Report). The MedPAC Report provided examples of safeguards
included in OIG advisory opinions and posited that gainsharing programs
could lead to program savings over time. See id. at p. 46.
Later that year, the Chief Counsel to the Inspector General
testified to the House Committee on Ways and Means about gainsharing.
The testimony highlighted three types of safeguards that the OIG looked
for when evaluating the risks posed by a gainsharing program: Measures
that promote accountability, adequate quality controls, and controls on
payments that may change referral patterns. See Testimony of Lewis
Morris, Chief Counsel to the Inspector General, House Committee on Ways
and Means, Subcommittee on Health (October 7, 2005), available at
https://oig.hhs.gov/testimony/docs/2005/Gainsharing10-07-05.pdf.
Although the testimony focused largely on specific risks in gainsharing
programs, and safeguards to counteract those risks, the testimony also
explained that if properly structured, ``gainsharing arrangements may
offer opportunities for hospitals to reduce costs without causing
inappropriate reductions in medical services or rewarding referrals of
Federal health care program patients.'' Id. at p. 1. In fact, OIG would
be unlikely to bring a case against a hospital or physician for a
gainsharing arrangement that included patient and program safeguards
such as those identified in our advisory opinions.\15\
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\15\ OIG has never pursued any gainsharing CMP case. OIG always
has been, and remains, open to pursuing a gainsharing CMP case under
appropriate facts. Prior to initiating any such case, we would
consider the factors set out in the advisory opinions and
considerations discussed in this preamble. Pending further notice
from OIG, gainsharing arrangements are not an enforcement priority
for OIG unless the arrangement lacks sufficient patient and program
safeguards.
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In addition, since 2005, Congress has authorized, and the Secretary
has approved, a number of projects involving gainsharing. For example,
the Deficit Reduction Act of 2005 \16\ required the Secretary to
establish a gainsharing program to test and evaluate arrangements
between hospitals and physicians designed to govern utilization of
certain inpatient services to improve the quality and efficiency of
care. Section 3022 of ACA required the Secretary to establish a
Medicare shared savings program (Shared Savings program) and allowed
the Secretary to waive such requirements of sections 1128A and 1128B
and Title XVIII of the Act as may be necessary to carry out the
provisions of section 3022. In the Interim Final Rule implementing the
Shared Savings program waivers, the Secretary waived the Gainsharing
CMP with respect to certain aspects of the Shared Savings program,
subject to applicable conditions. See 76 FR 67992 (Nov. 2, 2011).
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\16\ Deficit Reduction Act of 2005, Public Law 109-171, Sec.
5007, 120 Stat. 4, 34-36 (2006).
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Both government and private insurers have increased efforts to
lower costs and improve the quality of care. Better ways of measuring
quality and outcomes exist now than in the past. The growth of health
information technology, developments in data analytics and quality
metrics, and broader use of evidence-based medicine all facilitate such
measurements and accountability for performance. For example, the
Shared Savings program, as enacted, promotes an evidence-based medicine
approach for accountable care organizations participating in the Shared
Savings program (ACOs): ``[t]he ACO shall define processes to promote
evidence-based medicine and patient engagement, report on quality and
cost measures, and coordinate care, such as through the use of
telehealth, remote patient monitoring, and other such enabling
technologies.'' Section 1899(b)(2)(G) of the Act.
Notwithstanding these and similar developments, the Gainsharing CMP
has not been amended by Congress. It prohibits a hospital from
knowingly making a payment, directly or indirectly, to a physician as
an inducement to reduce or limit services provided to Medicare or
Medicaid beneficiaries who are under the direct care of the physician.
The statute does not prohibit only payments to reduce medically
necessary services; it prohibits payments to reduce or limit
``services.'' Without a change in the statute, we continue to believe
that we cannot read a ``medically necessary'' element into the
prohibition. However, given the changes in the practice of medicine
over the years, including collaborative efforts among providers and
practitioners and the rise of widely accepted clinical metrics, we are
considering a narrower interpretation of the term ``reduce or limit
services'' than we have previously held.
Since issuing the Gainsharing SAB, we have had the opportunity to
examine a number of different gainsharing arrangements through our
advisory opinion process. In each favorable opinion we issued, we found
that the cost-saving measures proposed by the hospitals implicated the
statute. For example, in OIG Advisory Opinion No. 05-01, we stated:
``the Proposed Arrangement constitutes an inducement to reduce or limit
the current medical
[[Page 59730]]
practice at the Hospital.'' We went on to state that ``[w]e recognize
that the current medical practice may involve care that exceeds the
requirements of medical necessity. However, whether the current medical
practice reflects necessity or prudence is irrelevant for purposes of
the CMP.'' OIG Advisory Opinion No. 05-01 (issued Jan. 28, 2005, at pp.
7-8).\17\ This language implies that any change to current medical
practice that a hospital might initiate is potentially a reduction in
care that could trigger CMP liability. However, as hospitals move
towards using objective quality metrics, we recognize that a change in
practice does not necessarily constitute a limitation or reduction of
services, but may in fact constitute an improvement in patient care or
a reduction in cost without reducing patient care or diminishing its
quality.
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\17\ Under section 1862 of the Act, no payment may be made under
Part A or Part B for any expenses incurred for items or services
that (with certain exceptions) are not reasonable and necessary for
the diagnosis or treatment of illness or injury or to improve the
functioning of a malformed body member. Under the Part A prospective
payment system (PPS) for hospital inpatient stays, payments are made
for hospital stays that are reasonable and necessary; however,
additional payment is not made if a patient receives individual
items or services in excess of, or more expensive than, those
factored into the PPS payment for covered care.
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The regulatory text we are proposing largely tracks the statute and
is similar to the text proposed in 1994. Besides codifying the
gainsharing prohibition itself, we propose to add a definition of
``hospital'' to proposed section 42 CFR 1003.110 (current Sec.
1003.101). This definition would refer to the definitions of
``hospital'' and ``critical access hospital'' in the Act. In addition,
however, we are considering and solicit comments on whether we should
include a definition of the term ``reduce or limit services'' to
address the considerations we express above. If so, we solicit specific
proposals and safeguards that we should include in this definition to
ensure that the goal of the statute is met: To prevent hospitals from
paying physicians to discharge patients too soon or take other action
that inappropriately limits a beneficiary's care. We are not proposing
text of a definition at this time. We specifically solicit comments on
the following areas of concern, but we welcome any other comments
relating to the topic:
We have interpreted the prohibition on payments to reduce
or limit services as including payments to limit items used in
providing services, which is consistent with the definition of
``services'' found at 42 CFR 400.202. Is this interpretation
appropriate or necessary in the context of the Gainsharing CMP?
Should a hospital's decision to standardize certain items
(e.g., surgical instruments, medical devices, or drugs) be deemed to
constitute reducing or limiting care? Would the answer be the same if
the physicians were simply encouraged to choose from the standardized
items, but other items remained available for use when deemed
appropriate for any particular patient?
Should a hospital's decision to rely on protocols based on
objective quality metrics for certain procedures ever be deemed to
constitute reducing or limiting care (e.g., protocols calling for the
discontinuance of a prophylactic antibiotic after a specific period of
time)? Should hospitals deciding to compensate physicians in connection
with the use of such protocols be required to maintain quality-
monitoring procedures to ensure that these protocols do not, even
inadvertently, involve reductions in care? What types of monitoring and
documentation would be reasonable and appropriate?
Should a hospital desiring to standardize items or
processes as part of a gainsharing program be required to establish
certain thresholds based on historical experience or clinical
protocols, beyond which participating physicians could not share in
cost savings (i.e., change beyond the relevant threshold would be
deemed to constitute reducing or limiting services)? For example, in
OIG Advisory Opinion 05-01, the hospital had a policy of performing
blood cross-matching (in addition to typing and screening) in all cases
and proposed to perform cross-matching only when a patient required a
transfusion. The facts in that opinion were that less than 30 percent
of cases actually required transfusions, so 30 percent was used as the
threshold. Therefore, the surgeon group would not receive any share of
savings resulting from performing cross-matching in fewer than 30
percent of cases.
If we define ``reduce or limit services,'' should the
regulation include a requirement that the hospital and/or physician
participating in a gainsharing program notify potentially affected
patients about the program? Would such a requirement help ensure that
gainsharing payments were for legitimate purposes and not for the
purpose of reducing or limiting care?
Our proposal to define the term ``reduce or limit services'' and
our solicitation of comments related to that definition reflect our
recognition that the delivery of health care, and the potential
safeguards to protect patients and promote accountability for outcomes,
has been changing. We seek to interpret the statutory prohibition
broadly enough to protect beneficiaries and Federal health care
programs, but narrowly enough to allow low risk programs that further
the goal of delivering high quality health care at a lower cost. We
emphasize that this proposed regulation would interpret the Gainsharing
CMP. We have no authority to create an exception to the statute.
III. Regulatory Impact Statement
We have examined the impact of this proposed rule as required by
Executive Order 12866, the Regulatory Flexibility Act (RFA) of 1980,
the Unfunded Mandates Reform Act of 1995, and Executive Order 13132.
Executive Order 12866
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, if regulations are
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects; distributive impacts; and equity). A regulatory impact
analysis must be prepared for major rules with economically significant
effects, i.e., $100 million or more in any given year. This is not a
major rule as defined at 5 U.S.C. 804(2); it is not economically
significant because it does not reach that economic threshold.
This proposed rule would implement or codify new and existing CMP
authorities and exceptions and implement new or revised anti-kickback
statute safe harbors. The vast majority of providers and Federal health
care programs would be minimally impacted, if at all, by these proposed
revisions.
The changes to the safe harbors and CMP authorities and exceptions
would allow providers to enter into certain beneficial arrangements. In
doing so, this regulation would impose no requirements on any party.
Providers would be allowed to voluntarily seek to comply with these
provisions so that they would have assurance that participating in
certain agreements would not subject them to liability under the anti-
kickback statute and the beneficiary inducement or gainsharing CMPs.
These safe harbors and exceptions facilitate providers' ability to
provide important health care and related services to communities in
need. We believe that the aggregate economic impact of the changes to
these regulations would be minimal and
[[Page 59731]]
would have no effect on the economy or on Federal or State
expenditures.
Accordingly, we believe that the likely aggregate economic effect
of these regulations would be significantly less than $100 million.
Regulatory Flexibility Act
The RFA and the Small Business Regulatory Enforcement and Fairness
Act of 1996, which amended the RFA, require agencies to analyze options
for regulatory relief of small businesses. For purposes of the RFA,
small entities include small businesses, non-profit organizations, and
government agencies. Most providers are considered small entities by
having revenues of $7 million to $35.5 million or less in any one year.
For purposes of the RFA, most physicians and suppliers are considered
small entities.
The changes to the CMP provisions would be minimal, and the changes
to the anti-kickback statute safe harbors would not significantly
affect small providers as these would not impose any requirement on any
party.
In summary, we have concluded that this proposed rule should not
have a significant impact on the operations of a substantial number of
small providers and that a regulatory flexibility analysis is not
required for this rulemaking.
In addition, section 1102(b) of the Act (42 U.S.C. 1302) requires
us to prepare a regulatory impact analysis if a rule under Titles XVIII
or XIX or section B of Title XI of the Act may have a significant
impact on the operations of a substantial number of small rural
hospitals. For the reasons stated above, we do not believe that any
provisions or changes proposed here would have a significant impact on
the operations of rural hospitals. Thus, an analysis under section
1102(b) is not required for this rulemaking.
Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law
104-4, also requires that agencies assess anticipated costs and
benefits before issuing any rule that may result in expenditures in any
one year by State, local, or tribal governments, in the aggregate, or
by the private sector, of $100 million, adjusted for inflation. We
believe that no significant costs would be associated with these
proposed revisions that would impose any mandates on State, local, or
tribal governments or the private sector that would result in an
expenditure of $141 million (after adjustment for inflation) in any
given year.
Executive Order 13132
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a rule that imposes substantial
direct requirements or costs on State and local governments, preempts
State law, or otherwise has Federalism implications. In reviewing this
rule under the threshold criteria of Executive Order 13132, we have
determined that this proposed rule would not significantly affect the
rights, roles, and responsibilities of State or local governments.
IV. Paperwork Reduction Act
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995.
List of Subjects
42 CFR Part 1001
Administrative practice and procedure, Fraud, Grant programs--
health, Health facilities, Health professions, Maternal and child
health, Medicaid, Medicare.
42 CFR Part 1003
Fraud, Grant programs--health, Health facilities, Health
professions, Medicaid, Reporting and recordkeeping.
For the reasons set forth in the preamble, the Office of Inspector
General, Department of Health and Human Services, proposes to amend 42
CFR chapter V as follows:
PART 1001--PROGRAM INTEGRITY--MEDICARE AND STATE HEALTH CARE
PROGRAMS
0
1. The authority citation for part 1001 continues to read as follows:
Authority: 42 U.S.C. 1302, 1320a-7, 1320a-7b, 1395u(j),
1395u(k), 1395w-104(e)(6), 1395y(d), 1395y(e), 1395cc(b)(2)(D), (E)
and (F), and 1395hh; and sec. 2455, Public Law 103-355, 108 Stat.
3327 (31 U.S.C. 6101 note).
0
2. Section 1001.952 is amended by revising paragraphs (f)(2), (k)
introductory text, and by adding paragraphs (k)(3), (k)(4), (z), (aa),
and (bb) to read as follows:
Sec. 1001.952 Exceptions.
* * * * *
(f) * * *
(2) Any payment the participant makes to the referral service is
assessed equally against and collected equally from all participants
and is based only on the cost of operating the referral service, and
not on the volume or value of any referrals to or business otherwise
generated by either party for the other party for which payment may be
made in whole or in part under Medicare, Medicaid, or ther Federal
health care programs.
* * * * *
(k) Waiver of beneficiary coinsurance and deductible amounts. As
used in section 1128B of the Act, ``remuneration'' does not include any
reduction or waiver of a Medicare or a State health care program
beneficiary's obligation to pay coinsurance or deductible amounts as
long as all the standards are met within one of the following
categories of health care providers or suppliers.
* * * * *
(3) If the copayment, coinsurance, or deductible amounts are owed
to a pharmacy (including, but not limited to, pharmacies of the Indian
Health Service, Indian tribes, tribal organizations, and urban Indian
organizations) for cost-sharing imposed under part D of Title XVIII
provided that--
(i) The waiver is not offered as part of an advertisement or
solicitation and
(ii) Except for waivers or reductions offered to subsidy-eligible
individuals (as defined in section 1860D-14(a)(3)) to which only
requirement in paragraph (k)(3)(i) of this section applies:
(A) The pharmacy does not routinely waive copayment, coinsurance,
or deductible amounts and
(B) The pharmacy waives the copayment, coinsurance, or deductible
amounts only after determining in good faith that the individual is in
financial need or fails to collect the copayment, coinsurance, or
deductible after making reasonable collection efforts.
(4) If the coinsurance or deductible amounts are owed to an
ambulance provider or supplier for emergency ambulance services for
which Medicare pays under a fee-for-service payment system and all the
following conditions are met:
(i) The ambulance provider or supplier is owned and operated by a
State, a political subdivision of a State, or a federally recognized
Indian tribe;
(ii) The ambulance provider or supplier is the Medicare Part B
provider or supplier of the emergency ambulance services;
(iii) The ambulance provider's or supplier's reduction or waiver of
coinsurance or deductible amounts is not considered to be the
furnishing of free services paid for directly or indirectly by a
government entity;
[[Page 59732]]
(iv) The ambulance supplier offers the reduction or waiver on a
uniform basis, without regard to patient-specific factors; and
(v) The ambulance provider or supplier must not later claim the
amount reduced or waived as a bad debt for payment purposes under
Medicare or otherwise shift the burden of the reduction or waiver onto
Medicare, a State health care program, other payers, or individuals.
* * * * *
(z) As used in section 1128B of the Act, ``remuneration'' does not
include any remuneration between a federally qualified health center
(or an entity controlled by such a health center) and a Medicare
Advantage organization pursuant to a written agreement described in
section 1853(a)(4) of the Act.
(aa) Medicare Coverage Gap Discount Program. As used in section
1128B of the Act, ``remuneration'' does not include a discount in the
price of a drug when the discount is furnished to a beneficiary under
the Medicare Coverage Gap Discount Program established in section
1860D-14A of the Act, so long as all the following requirements are
met:
(1) The discounted drug meets the definition of ``applicable drug''
set forth in section 1860D-14A(g) of the Act;
(2) The beneficiary receiving the discount meets the definition of
``applicable beneficiary'' set forth in section 1860D-14A(g) of the
Act; and
(3) The manufacturer of the drug participates in, and is in full
compliance with all requirements of, the Medicare Coverage Gap Discount
Program.
(bb) Local Transportation. As used in section 1128B of the Act,
``remuneration'' does not include free or discounted local
transportation made available by an Eligible Entity (as defined in this
paragraph (bb)) to established patients who are Federal health care
program beneficiaries for the purpose of obtaining medically necessary
items or services if all the following conditions are met:
(1) The availability of the free or discounted local transportation
services is not determined in a manner related to the past or
anticipated volume or value of Federal health care program business;
(2) The free or discounted local transportation services do not
take the form of air, luxury, or ambulance-level transportation;
(3) The free or discounted local transportation services are not
marketed or advertised, no marketing of health care items and services
occurs during the course of the transportation or at any time by
drivers who provide the transportation, and drivers or others arranging
for the transportation are not paid on a per-beneficiary transported
basis;
(4) The Eligible Entity that makes the free or discounted
transportation available furnishes the services only:
(i) To the established patient (and, if needed, a person to assist
the patient) to obtain medically necessary items or services, and
(ii) Within the local area of the health care provider or supplier
to which the patient would be transported;
(5) The Eligible Entity that makes the transportation available
bears the costs of the free or discounted local transportation services
and does not shift the burden of these costs onto Medicare, a State
health care program, other payers, or individuals.
Note to paragraph (bb): For purposes of this paragraph (bb), an
``Eligible Entity'' is any individual or entity, except for individuals
or entities (or family members or others acting on their behalf) that
primarily supply health care items; and if the distance from the
patient's location to the provider or supplier to which the patient
would be transported is no more than 25 miles, the transportation is
deemed to be local.
PART 1003--CIVIL MONEY PENALTIES, ASSESSMENTS AND EXCLUSIONS
0
3. The authority citation for part 1003 continues to read as follows:
Authority: 42 U.S.C. 262a, 1302, 1320-7, 1320a-7a, 1320b-10,
1395u(j), 1395u(k), 1395cc(j), 1395w-141(i)(3), 1395dd(d)(1),
1395mm, 1395nn(g), 1395ss(d), 1396b(m), 11131(c), and 11137(b)(2).
0
4. Section 1003.101 as proposed to be redesignated as 1003.110 and
amended at 79 FR 27080 (May 12, 2014) is further amended by adding the
definition of ``Hospital'' and by amending the definition of
``Remuneration'' by revising the introductory text and adding
paragraphs (5) through (9) to read as follows:
Sec. 1003.101 Definitions.
* * * * *
Hospital means a hospital as defined in section 1861(e) of the Act
or critical access hospital as defined in section 1861(mm)(1) of the
Act.
* * * * *
Remuneration, for the purposes of Sec. 1003.1000(a) of this part,
is consistent with the definition in section 1128A(i)(6) of the Act and
includes the waiver of coinsurance and deductible amounts (or any part
thereof) and transfers of items or services for free or for other than
fair market value. The term ``remuneration'' does not include--
* * * * *
(5) A reduction in the copayment amount for covered OPD services
under section 1833(t)(8)(B) of the Act;
(6) [Reserved];
(7) The offer or transfer of items or services for free or less
than fair market value by a person if--
(i) The items or services consist of coupons, rebates, or other
rewards from a retailer;
(ii) The items or services are offered or transferred on equal
terms available to the general public, regardless of health insurance
status; and
(iii) The offer or transfer of the items or services is not tied to
the provision of other items or services reimbursed in whole or in part
by the program under title XVIII or a State health care program (as
defined in section 1128(h) of the Act);
(8) The offer or transfer of items or services for free or less
than fair market value by a person, if--
(i) The items or services are not offered as part of any
advertisement or solicitation;
(ii) The offer or transfer of the items or services is not tied to
the provision of other items or services reimbursed in whole or in part
by the program under Title XVIII or a State health care program;
(iii) There is a reasonable connection between the items or
services and the medical care of the individual; and
(iv) The person provides the items or services after determining in
good faith that the individual is in financial need;
(9) Waivers by a sponsor of a Prescription Drug Plan under part D
of Title XVIII or a Medicare Advantage organization offering an MA-PD
Plan under part C of such title of any copayment for the first fill of
a covered Part D drug (as defined in section 1860D-2(e)) that is a
generic drug (as defined in 42 CFR 423.4) for individuals enrolled in
the Prescription Drug Plan or MA-PD Plan, respectively, as long as such
waivers are included in the benefit design package submitted to CMS.
This exception is effective for coverage years beginning after
publication of the final rule.
* * * * *
0
5. Part 1003, as proposed to be amended at 79 FR 27080, (May 12, 2014)
is further amended by adding subpart G to read as follows:
Subpart G--CMPs for Gainsharing Violations
Sec.
1003.700 Basis for civil money penalties.
[[Page 59733]]
1003.710 Amount of penalties.
1003.720 Determinations regarding the amount of penalties.
Sec. 1003.700 Basis for civil money penalties.
OIG may impose a penalty against any person who it determines in
accordance with this part--
(a) Is a hospital that knowingly makes a payment, directly or
indirectly, overtly or covertly, in cash or in kind, to a physician as
an inducement to reduce or limit services provided to an individual who
is eligible for Medicare or Medicaid benefits and who is under the
direct care of the physician;
(b) Is a physician who knowingly receives a payment described in
paragraph (a) of this section.
Sec. 1003.710 Amount of penalties.
(a) OIG may impose a penalty against a hospital of not more than
$2,000 for each individual for whom payment was made to a physician in
violation of Sec. 1003.700.
(b) OIG may impose a penalty against a physician of not more than
$2,000 for each individual for whom the physician received payment from
a hospital in violation of Sec. 1003.700.
Sec. 1003.720 Determinations regarding the amount of penalties.
In determining the amount of any penalty or assessment, OIG will
consider the factors listed in Sec. 1003.140, as well as the
following:
(a) The nature of the payment designed to reduce or limit services
and the circumstances under which it was made,
(b) The extent to which the payment encouraged the limiting of
medical care or the premature discharge of the patient,
(c) The extent to which the payment caused actual or potential harm
to program beneficiaries, and
(d) The financial condition of the hospital (or physician) involved
in the offering (or acceptance) of the payment.
Dated: March 1, 2014.
Daniel R. Levinson,
Inspector General.
Approved: September 18, 2014.
Sylvia M. Burwell,
Secretary.
[FR Doc. 2014-23182 Filed 10-2-14; 8:45 am]
BILLING CODE 4152-01-P