By Alan M. Kirschenbaum & David C. Gibbons –On December 7, 2016, the U.S. Department of Health and Human Services Office of Inspector General (“OIG”) published a Final Rule amending the safe harbor regulations under the Federal health care program antikickback statute (“AKS”) (42 U.S.C. § 1320a-7b(b)) and established exceptions to the Civil Monetary Penalty (“CMP”) prohibiting remuneration to Medicare and Medicaid beneficiaries (42 U.S.C. § 1320a-7a). This Final Rule changes existing safe harbors and adds new ones, while also adding new exceptions to the beneficiary inducement CMP.

ed to fit within a regulatory exception. (42 U.S.C. § 1320a-7b(b)). The statute has been interpreted to cover any arrangement in which “one purpose” of the remuneration is to induce referrals for or receipt of federal program business. (United States v. Kats, 871 F.2d 105 (9th Cir. 1989); United States v. Greber, 760 F.2d 68 (3d Cir. 1985)). An AKS violation is a felony punishable by up to 10 years in prison, a $100,000 criminal penalty, a $100,000+[i] civil penalty, treble damages, and exclusion from participating in the Medicare or Medicaid programs. (42 U.S.C. §§ 1320a-7 and 1320a-7b(b)(2)(B); 42 C.F.R. §§ 1003.300 and 1003.310; 45 C.F.R. § 102.3). An AKS violation is likely also a violation of the federal False Claims Act (42 U.S.C. § 1320a-7b(g); 31 U.S.C. § 3729), which exposes defendants to mandatory self-reports and repayments, additional civil penalties of $11,000+ to $22,000+ per claim, treble damages, private qui tam lawsuits, and costs of suit. (31 U.S.C. §§ 3729 and 3730; 42 U.S.C. §§ 1320a-7a and 1320a-7k(d); 28 C.F.R. §§ 85.5 and 1003.200(a) and (b)(k)).Eliminating Kickbacks in Recovery Act ("EKRA"). EKRA was enacted in response to the opioid epidemic. It parallels the AKS and prohibits offering, soliciting, paying, or receiving any remuneration to induce or reward referrals to or use of any laboratory, clinical treatment facility, or recovery home. (18 U.S.C. § 220(a)). “Clinical treatment facilities” and “recovery homes” are generally limited to such facilities that treat or care for substance use disorders. (Id. at § 220(e)). However, “laboratory” is defined broadly to include any facility providing lab services whether or not related to substance use disorder. (Id., incorporating definition of “laboratory” at 42 U.S.C. § 263a(a)). Accordingly, any provider or facility offering lab services must beware EKRA. EKRA violations are felonies and subject the defendant to fines of up to $200,000 and up to 10 years in prison. (Id. at § 220(a)). Unlike the federal AKS, EKRA is

(42 U.S.C. §§ 1320a-7 and 1320a-7b(b)(2)(B); 42 C.F.R. §§ 1003.300 and 1003.310; 45 C.F.R. § 102.3). An AKS violation is also a violation of the federal False Claims Act (42 U.S.C. § 1320a-7b(g); 31 U.S.C. § 3729), which exposes defendants to mandatory self-reports and repayments, additional civil penalties of $11,000+ to $22,000+ per claim, treble damages, private qui tam lawsuits, and costs of suit. (31 U.S.C. §§ 3729 and 3730; 42 U.S.C. §§ 1320a-7a and 1320a-7k(d); 28 C.F.R. §§ 85.5 and 1003.200(a) and (b)(k)).Civil Monetary Penalties Law (“CMPL”).

By Alan M. Kirschenbaum & David C. Gibbons –On October 3, 2014, the U.S. Department of Health and Human Services Office of Inspector General (“OIG”) published a Proposed Rule to amend the safe harbor regulations under the Federal health care program antikickback statute (“AKS”) (42 U.S.C. § 1320a-7b(b)), and to establish exceptions to the Civil Monetary Penalty (“CMP”) statute (42 U.S.C. § 1320a-7a). The Proposed Rule would change existing safe harbors and add new ones, and would add new exceptions to the beneficiary inducement CMP.

In light of these definitions, remuneration is only provided when there is a benefit and “the value of a benefit can only be quantified by reference to its fair market value.” The court also noted that this “understanding of ‘remuneration’ is supported by the definition of ‘remuneration’ in 42 U.S.C. § 1320a-7a(i)(6), which relates to civil monetary penalties in connection with medical fraud.” The court noted that although this definition of remuneration is in a different section of the statute, “it also defines ‘remuneration’ to include the ‘transfer[] of items or services for free or for other than fair market value’ and thus is consistent with our view of the correct definition.”Given the dictionary definition of remuneration and its definition in a related statutory provision, the court concluded that “the issue of fair market value is not limited to” defendant’s safe harbor defense, “but is rather something [plaintiff] must address in order to show that [the defendant] offered or paid remuneration to physician tenants.”

Seee.g., N.Y. Educ. Law § 6706 (Corporate Practice – Veterinary). Examination of regulatory issues pertaining to ambulatory surgery centers and other health care facilities is beyond the scope of this article.2 Federal fraud and abuse laws comprise the False Claims Act, 31 U.S.C. §§ 3729-3733, the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), the Physician Self-Referral Law (Stark), 42 U.S.C. § 1395nn, the Civil Monetary Penalties Law, 42 U.S.C. § 1320a-7a, the Criminal Health Care Fraud Statute, 18 U.S.C. §§ 1347 and 1349, the Exclusion Authorities, 42 U.S.C. §§ 1320a-7 and 1320c-5, and regulations promulgated thereunder.3 42 U.S.C. § 1320a-7b(b).4 The asset acquisition must be at fair market value in order to avoid violations of the CPOM prohibition, the fee-splitting prohibition and the AKS.

”It is important for healthcare providers to be aware that HHS-OIG and CMS have identified the collection of overpayments as a priority and to ensure that they both identify and return any overpayments they may have already received, and institute safeguards to identify such overpayments going forward. B. Healthcare Providers May Face Significant Exposure for Failure to Identify and Return OverpaymentsA provider who fails to abide by the ACA’s 60-day rule for identifying and returning overpayments from the government may face liability under both the FCA and the Civil Monetary Penalties Law (“CMPL”), 42 U.S.C. § 1320a–7a. Pursuant to the FCA, a provider found liable for a reverse false claim faces: (1) treble damages (i.e. three times the amount of actual damages suffered by the Government); (2) a civil penalty between $5,000 and $10,000 for each false claim or knowing failure to return an overpayment; and (3) reasonable attorney’s fees and costs to the successful relator.

[1] Medicare and State Health Care Programs: Fraud and Abuse; Revisions to Safe Harbors Under the Anti-Kickback Statute, and Civil Monetary Penalty Rules Regarding Beneficiary Inducements and Gainsharing, 79 Fed. Reg. 59717-01 (Oct. 3, 2014), 2014 WL 4925461 at *59719.[2] 42 U.S.C. § 1320a-7a(a)(5).[3] Id. § 1320a-7a(a)(6).

This means that health plans, carriers, and other entities must be aware of instances where those programs could act as a second payor; in those instances, the AKS will apply.Civil Monetary Penalties LawThe Civil Monetary Penalties Law (“CMPL”), 42 U.S.C. 1320a-7a prohibits offers or transfers of any remuneration that a person knows or should know is likely to influence an individual eligible for benefits under Medicare or a State health care program (defined above) to order or receive any items or services from a particular medical provider or supplier that may be paid in whole or in part by Medicare or a State health care program. 42 U.S.C. 1320a-7a(a)(5).

OVERVIEWOn April 21, 2020, the US Department of Health and Human Services (HHS) Office of Inspector General (OIG) released a proposed rule that would amend its civil money penalty (CMP) regulations to address a 21st Century Cures Act amendment to the CMP Law (CMPL) authorizing HHS to impose CMPs, assessments and exclusions upon individuals and entities that engage in fraud and other misconduct related to HHS grants, contracts and other agreements (42 USC 1320a-7a(o)-(s)). OIG’s proposed rule would also address the Cures Act amendment to the Public Health Services Act (42 USC 300jj-52) authorizing OIG to investigate claims of information blocking and providing the Secretary of HHS authority to impose CMPs for information blocking, as well as Bipartisan Budget Act of 2018 increases to penalty amounts in the CMPL.