Missouri Rural Health Get Link'd Conference

1. Missouri Rural Health Get Link'd Conference

3. Navigating the Anti-Kickback and Civil Monetary Penalties Laws and Regulations November 16, 2016 Presented by Brian F. Bauer | 248.457.7821 | bbauer@hallrender.com

4. Overview • The Prohibitions of the Anti-Kickback Statute (AKS) and Civil Monetary Penalties law (CMP) • Proposed New AKS safe harbors and CMP exceptions • OIG Advisory Opinions re transportation • Where can we go from here?

5. Proposed Anti-Kickback Safe Harbors • The federal Anti-Kickback Statute (AKS) makes it a criminal act to knowingly and willfully offer, pay, solicit or receive remuneration in exchange for referrals of items or services reimbursable by federal health care programs. The AKS has statutory exceptions and regulatory safe harbors that, if followed, outline certain activities and arrangements that will be deemed to not violate the AKS.

6. Prohibitions of the AKS and CMP • The AKS provides for: • criminal penalties for individuals or entities that knowingly and willfully offer, pay, solicit, or receive remuneration to induce or reward the referral of business reimbursable under any of the federal health care programs • ‘‘remuneration’’ includes the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in kind

7. Prohibitions of the AKS and CMP • The AKS provides for: • 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 of the AKS may also result in civil penalties, program exclusion and liability under the false claims act

8. Prohibitions of the AKS and CMP • The AKS has been interpreted to cover any arrangement where one purposeof the remuneration was to obtain money for the referral of services or to induce further referrals

9. Prohibitions of the AKS and CMP • The CMP prohibits an individual or entity from offering or transferring remuneration to a Medicare or Medicaid beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive from a particular provider, practitioner, or supplier any item or service payable by Medicare or a State health care program (including Medicaid)

10. Prohibitions of the AKS and CMP • The CMP defines ‘‘remuneration’’ as including transfers of items or services for free or for other than fair market value. OIG has previously taken the position that incentives that are only nominal in value are not prohibited by the statute and has interpreted nominal in value to mean no more than $10 per item, or $50 in the aggregate on an annual basis

11. Proposed Anti-Kickback Safe Harbors On October 3, 2014, the Office of Inspector General (“OIG”) published a proposed rule to add new safe harbors to the AKS as well as new exceptions to the CMP for inducements being offered to federal health care program beneficiaries

12. Proposed Anti-Kickback Safe Harbors • Local Transportation • The Proposed Rule establishes a new safe harbor intended to protect free and/or discounted local transportation services that are provided to federal health care program beneficiaries

13. Proposed Anti-Kickback Safe Harbors • Preliminarily, the requirements for the safe harbor are: • The free or discounted transportation would only be available to established patients; • Air, luxury and ambulance transportation would not be protected by the safe harbor; • Transportation services that are publicly advertised or marketed would be excluded from safe harbor protection;

14. Proposed Anti-Kickback Safe Harbors • Preliminarily, the requirements for the safe harbor are: • Drivers and others involved in arranging the transportation services cannot be compensated on a per-beneficiary transported basis; • Health care items and services cannot be marketed during the course of the transportation;

15. Proposed Anti-Kickback Safe Harbors • Preliminarily, the requirements for the safe harbor are: • Transportation will only be protected if it is for the patient and, if needed, a family member; and • Transportation must be 25 miles or less to be considered local.

16. Civil Monetary Penalty Rules • In addition to the amendments of the AKS safe harbor regulations, the proposed rule intended to codify amendments to the CMP that were enacted in the Affordable Care Act (ACA) • Currently, the CMP proscribes the offer of remuneration that an entity knows or should know is likely to influence another individual to choose a certain provider

17. Civil Monetary Penalty Rules • Beneficiary Inducements.  The ACA amended the definition of "remuneration" by allowing four exceptions for certain beneficiary inducements prohibited by the CMP.  The proposed rule elaborates on the ACA language and sets forth additional interpretations and requirements for these CMP remuneration exceptions

18. Civil Monetary Penalty Rules • The four ACA exceptions are: • Any remuneration that promotes access to care and poses a low risk of harm to patients and federal health care programs; • The offer or transfer of coupons, rebates or other rewards from a retailer if the program meets certain requirements;

19. Civil Monetary Penalty Rules • The four ACA exceptions are: • The transfer of items or services by a person that are not offered as part of an advertisement or solicitation, that are not tied to the provision of other items or services reimbursed under a federal health care program, for which there is a reasonable connection between the items or services and the medical care of the individual and for which the person providing the items or services determines in good faith that the individual is in financial need; and

20. Civil Monetary Penalty Rules • The four ACA exceptions are: • Waivers of cost-sharing for the first fill of a generic drug for Medicare Part D beneficiaries.

21. Civil Monetary Penalty Rules • The ACO Patient Incentive Waiver is of limited use because it offers protection only so long as the participants are also participating in a MSSP ACO

22. OIG Advisory Opinions Re Transportation • On October 21, 2015, the Office of Inspector General (“OIG”) published Advisory Opinion No. 15-13 addressing a proposed transportation arrangement

23. OIG Advisory Opinions Re Transportation • The requestor was an integrated health system offering health care services in a rural community with limited access to public transportation. • Requestor operates a 505-bed medical center ("Medical Center"), a 72-bed community hospital located 10 miles away from the Medical Center, a 55-bed community hospital located 16 miles away from the Medical Center, an ambulatory surgical center located 2 miles away from the Medical Center and a multi-specialty clinic employing more than 1,000 physicians.

24. OIG Advisory Opinions Re Transportation • Under the Arrangement, Requestor would offer a van shuttle service along two routes encompassing a number of the system facilities and a designated "drop-off and pick-up" stop centrally located in the town served by the Medical Center. • The proposed transportation would be provided to patients of the system free of charge.

25. OIG Advisory Opinions Re Transportation • Under the Arrangement, one van route would run an 18-mile circuit and make stops at the Medical Center, one of the community hospitals, the ASC and the drop-off and pick-up location; while the second route would run a 10- mile circuit that connects the Medical Center and the other community hospital. • Both vans would operate Monday through Thursday and would make several trips per day between the various facilities.

26. OIG Advisory Opinions Re Transportation • Under the Arrangement, the shuttle service would provide transportation for patients and those accompanying them to visits at any of the Requestor's facilities along the two routes without regard to their health insurance status or ability to pay for medical services.

27. OIG Advisory Opinions Re Transportation • When analyzing the arrangement, OIG identified the following facts that minimized the potential risk of the Arrangement: • The shuttle service would be made broadly available to patients without regard to their diagnoses, conditions, treatments or type of insurance coverage, suggesting that the free transportation's availability would not be determined in a manner related to past or anticipated volume or value of Medicare or Medicaid referrals

28. OIG Advisory Opinions Re Transportation • When analyzing the arrangement, OIG identified the following facts that minimized the potential risk of the Arrangement: • The shuttle service would use vans, rather than air, luxury or ambulance-level services, which are more valuable and thus pose a greater likelihood of creating an improper inducement

29. OIG Advisory Opinions Re Transportation • When analyzing the arrangement, OIG identified the following facts that minimized the potential risk of the Arrangement: • Van drivers would be salaried employees of the system who would not be paid on a per-patient or per-transport basis. • Because the longest circuit covers a distance of just 18 miles, the shuttle service would only be offered locally. This reduces the likelihood of vans "leapfrogging" competitor facilities and recruiting beneficiaries from beyond Requestor's primary service area

30. OIG Advisory Opinions Re Transportation • When analyzing the arrangement, OIG identified the following facts that minimized the potential risk of the Arrangement: • The shuttle service would not be marketed to the general public • Health care items or services would not be marketed to patients during transportation or at any other time by the drivers

31. OIG Advisory Opinions Re Transportation • When analyzing the arrangement, OIG identified the following facts that minimized the potential risk of the Arrangement: • Requestor would bear the full cost of the shuttle service without passing any costs on to Medicare, Medicaid, other payers or individual patients. • Because public transportation options are limited in Requestor's community, the shuttle service would provide patients of Requestor with alternative means of transportation to the system facilities, thereby facilitating access to health care services

32. Where can we go from here? • Itemize or develop transportation arrangements that meet the needs of the patients and communities • Structure the arrangements so that they meet the existing guidance (or develop justification for deviating from existing guidance and provide alternative safeguards to address OIG concerns) • Request an advisory opinion(s) for the proposed arrangement(s)

33. Brian F. Bauer 248.457.7821 bbauer@hallrender.com This presentation is solely for educational purposes and the matters presented herein do not constitute legal advice with respect to your particular situation. Anchorage | Dallas | Denver | Detroit | Indianapolis | Louisville | Milwaukee | Philadelphia | Seattle | Washington, D.C.