As discussed in my first blog post of this series (link here), the federal Anti-Kickback Statute (“AKS”) provides criminal penalties, classified as a felony, punishable of up to five years in prison and fines of up to $25,000.00 for any individual or entity that knowingly and willingly solicits, offers, pays, or receives remuneration in order to induce any business that is reimbursable under the federal healthcare programs.
When the AKS was enacted in 1972 there were no exceptions or “safe harbors” for individuals or entities that were entering into certain business transactions that many influencers in the healthcare industry felt should be immune from the law. However, it became evident less than 15 years after the statute was passed, that judicial interpretation would lead to some not-so-fair outcomes for those covered individuals and entities. So between 1991 and 1999, the OIG promulgated several permissible acts (“safe harbors”) under the AKS that help take the sting out of the otherwise overly-broad legislation and allow for business transactions that do not have strong potential for corruption and abuse. As a matter of fact, each year the OIG solicits recommendations from those effected by the AKS, for additional safe harbors or modifications those currently in existence.
Currently there are 25 safe harbors to the AKS, which can be generally listed as follows:
- Investment interests
- Price reduction offered to health plans
- Space rental
- Practitioner recruitment
- Equipment rental
- Obstetrical malpractice insurance subsidies
- Personal services and management contracts
- Investment in group practices
- Sale of practice
- Cooperative hospital service organizations
- Referral services
- Ambulatory Surgical Centers
- Referral arrangements for specialty services
- Price reductions offered to eligible managed care organizations
- Price reductions offered by contractors with substantial financial risk to managed care organizations
- Group Purchasing Organizations
- Ambulance replenishing
- Waiver of beneficiary coinsurance and deductible amounts
- Health centers
- Increased coverage, reduced cost-sharing amounts, or reduced premium amounts offered by health plans
- Electronic prescribing items and services
- Electronic health records items and services
Each one of these safe harbors, however, have very specific rules and many have been further interpreted in fraud alerts and Advisory Opinions by the OIG. Therefore, each one deserves individual attention and dissection to insure total comprehension and adherence. Some of the safe harbors are more complicated than others so in the following posts, I will address each to the extent necessary to explain them in simple, straightforward language.
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