OIG Exceptions to the Anti-Kickback Statute

Since 1991, the Office of the Inspector General (OIG) at the Department of Health and Human Services has promulgated more than twenty OIG exceptions to the Anti-Kickback Statute that prohibits the payment or solicitation of remuneration to induce or reward patient referrals or the generation of business payable by federal health care programs.

Although in many industries it is a normal practice to pay a fee or commission for business referrals, it is prohibited in federal health care programs under 42 CFR § 1320a-7b – known as the Anti-Kickback Statute. This is because healthcare professionals decide what health care services patients use and what drugs they are prescribed; and medical decisions that are influenced by the promise of remuneration could negatively impact patient outcomes and increase program costs.

Therefore, the Anti-Kickback Statute made it a criminal offense to knowingly and willfully offer, pay, solicit, or receive anything of value (not just money) for patient referrals, healthcare services, or healthcare products paid for by the federal government (i.e., Medicare). Importantly, the government does not need to prove patient harm or a financial loss to pursue a criminal case. The intent to offer, pay, solicit, or receive remuneration is sufficient to prove liability

Furthermore, individuals or businesses that make a federal healthcare claim that includes a violation of the Anti-Kickback Statute can be prosecuted for a violation of the False Claims Act in addition to the Anti-Kickback Statute. Since the Patient Protection and Affordable Care Act of 2010, “a person need not have actual knowledge … or specific intent to commit a violation” of the Anti-Kickback Statute. Consequently, providers can no longer argue that they did not know they were violating the False Claims Act because they were not aware the Anti-Kickback Statute existed.

Safe Harbors and OIG Exceptions to the Anti-Kickback Statute

Within the Anti-Kickback Statute, there are a number of safe harbor provisions which are exempt from civil and criminal provisions as they have been determined not to be of corrupt intent. These include properly-disclosed price discounts which are reflected in claims to the government, payments to legitimate employees, and space or equipment leases for which there is a contract of at least one year that clearly states the specifics of the lease including the amount of compensation.

Additionally, the HHS´ Office of the Inspector General can promulgate, revise, and remove OIG exceptions to the Anti-Kickback Statute. Initially these additional safe harbors were periodic and occurred up to six years apart. However, as pressure has increased on the Department of Health and Human Services to focus on value-based programs, they are becoming annual events with the objective of “reducing regulatory barriers to care coordination”.

The reduction in regulatory barriers to care coordination has been welcomed by healthcare organizations. The American Medical Association has claimed the latest OIG exceptions to the Anti-Kickback Statute enables providers to better engage with collaborative partnerships, while the American Hospital Association commented “putting patients first and taking action to modernize the rules so they support, rather than hinder, the teamwork among health care providers that is so essential to providing the best, most comprehensive patient care.”

It may be beneficial for HIPAA Covered Entities and Business Associates to keep up-to-date with any requests for information, proposed rules, and final rules issued by HHS´ Office of Inspector General, as the HHS has indicated further rule changes will open the door to new opportunities such as sharing data analytics services and providing smart pillboxes to patients. It is also hoped that hospitals and physicians will also have more flexibility to collaborate in new ways to coordinate care for patients being discharged from hospital.

Author: Steve Alder has many years of experience as a journalist, and comes from a background in market research. He is a specialist on legal and regulatory affairs, and has several years of experience writing about HIPAA. Steve holds a B.Sc. from the University of Liverpool.