OIG's Proposal on Safe Harbors Lacks Specifics, Hospital Group Says

Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.

By James Swann

Dec. 2 — A proposed rule that would expand anti-kickback safe harbors lacks clear regulatory language and allows for the potential imposition of penalties on hospitals that reward their physicians for following patient care protocols, according to a Dec. 1 comment letter from the American Hospital Association.

“As you are aware, much of what is in the proposed rule is effectively a request for information from the OIG,” the AHA letter, signed by AHA Executive Vice President Rick Pollack, said.

“We expect that the next step in the process will be the issuance of proposed regulations with a notice-and-comment period,” the letter said.

The Department of Health and Human Services Office of Inspector General published the proposed rule (RIN 0936–AA06) in the Oct. 3 Federal Register (79 Fed. Reg. 59,717). The proposal would codify provisions that were originally included in both the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 and the Affordable Care Act, including expanding anti-kickback statute (AKS) and civil monetary penalty (CMP) safe harbors to cover pharmacy cost-sharing waivers for impoverished Medicare Part D beneficiaries and cost-sharing waivers for emergency ambulance services offered by state or municipal-owned organizations. Comments are due Dec. 2.

Physician Protections

Although the AHA said it supports the OIG's intentions to narrow the interpretation of prohibited inducements made to physicians that result in reductions or limitations to services, it said in the absence of clear regulatory language that it's worried that any changes in a doctor's practice, including standardizing medical equipment or following medical protocols, could be considered potential violations of the AKS or the CMP.

To counter that, the AHA said it's “renewing our proposal that the prohibition should be interpreted to mean to reduce or limit medically necessary services.”

The AHA said following protocols based on objective metrics can help improve both quality and efficiency and shouldn't lead to violations.

“In practice, adherence to objective metrics—including the Physician Quality Reporting System quality measures and other metrics utilized by the Centers for Medicare & Medicaid Services—will, on a frequent basis, lead to change in a physician’s practice,” the AHA said.

The letter also said reducing or limiting services that provide no value to patients can help the health-care industry improve patient health; improve quality of patient care; and lower costs.

Access to Care

The AHA letter also focused on the proposed rule's impact on beneficiaries and said that although it provides CMP safe harbors for any hospital support provided to beneficiaries that increases access to care and is either low-risk or based on financial need, the same safe harbors don't apply to the AKS.

“Access to care should be interpreted more broadly than only access to medically necessary services or items,” the letter said, and should include transportation, tools for self-monitoring such as blood pressure cuffs and physician follow-up after discharge.

The proposed rule should also expand the safe harbors covering patient transportation, the AHA said. As written, the proposed rule provides a safe harbor for transporting only “established patients.”

“This limitation would unreasonably prevent a hospital from assisting a beneficiary in keeping the critical first appointment or in completing registration in advance of the visit,” the AHA said.

Additionally, the proposed rule would set a limit of 25 miles for any patient transportation covered by the safe harbors, which could potentially lead to patients living in rural areas being denied access to care, the AHA said.

“Setting 25 miles as the outer distance for transport would effectively preclude critical access hospitals and sole community hospitals from meeting the transportation needs of those they serve,” the letter said.

Chain Drug Stores

The National Association of Chain Drug Stores (NACDS) also commented on the proposed rule in a late-November letter. It said it supports safe harbors for pharmacy cost-sharing waivers for Medicare Part D beneficiaries.

However, the NACDS said the OIG should expand the safe harbor beyond Medicare Part D to include all Medicare patients, including Medicare Part C (managed care) beneficiaries.

Applying the pharmacy cost-sharing waiver solely to Medicare Part D beneficiaries would “create unnecessary compliance problems for pharmacies, as they attempt to establish mechanisms and work processes for allowing Medicare Part D patients—but not other Medicare patients and other government program beneficiaries—to participate in copay waiver programs,” the NACDS said.

It also said the OIG should clarify what it means when it says pharmacies may not routinely offer cost-sharing waivers to patients.

“OIG should clarify that a pharmacy does not ‘routinely' waive cost-sharing so long as the pharmacy does not automatically waive cost sharing amounts for beneficiaries of government programs,” the NACDS letter said, and the OIG shouldn't use cost-sharing waivers given to patients with private insurance when determining whether a pharmacy routinely issues cost-sharing waivers.

To contact the reporter on this story: James Swann in Washington at jswann1@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at kcasey@bna.com


Request Health Care on Bloomberg Law