Kickbacks: OIG Withdrawal of Old Safe Harbor Proposals Clears Way for Meaningful Reform

Like the rest of the health care industry, labs need more not fewer new and modern Anti-Kickback Statute (AKS) safe harbors. So, the OIG’s decision to cancel new safe harbors in incubation seems like bad news. In fact, it can be interpreted as just the opposite, i.e., as an indication that real kickback relief is on the way. Here’s the dope.

Proposed Safe Harbors Being Withdrawn

On Aug. 1, the OIG announced that it was withdrawing two proposed rules to create new or expand existing AKS safe harbors:

• A 1994 proposed rule that would have codified in regulations OIG’s authority to levy civil monetary penalties (CMPs) when a hospital knowingly makes incentive payments to a physician as an inducement for reducing services to Medicare or Medicaid beneficiaries; and

• A 2002 proposed rule that would have expanded an existing safe harbor at 42 CFR 1001.952(k) to include waivers of cost sharing amounts for Part A and B services for holders of Medicare SELECT policies, a type of Medicare supplement (Medigap) plan.

What’s Really Going On

According to the notices, OIG is withdrawing the proposed rules to comply with an executive order instructing government agencies to identify regulations that can be repealed, replaced or modified. But the real intent of the move may be to clear the decks for bigger and better things. The 1994 and 2002 proposed rules were wallowing in obscurity and were probably never going to be finalized. In fact, the OIG indicates that, to its knowledge, the public never relied on nor was even aware that the rules existed. And with more meaningful relief in the pipeline, it makes sense that the OIG said that it’s getting rid of those old proposals now to “avoid confusion.”

By contrast, the CMS initiative to amend the AKS safe harbors and exceptions to the beneficiary inducement CMP provisions for coordinated care has garnered significant attention. After collecting public feedback, CMS sent a proposal to the White House Office of Management and Budget. Once OMB clears the proposal, it will become public which will probably be some time this fall.