AdvaMed Proposes Two New Safe Harbors Under Federal Anti-Kickback Statute For Value-Based Arrangements
By Jof Enriquez,
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The Advanced Medical Technology Association (AdvaMed) is proposing two new safe harbors to the federal anti-kickback statute that aims to protect value-based pricing arrangements and value-based warranties.
The U.S. Department of Health & Human Services (HHS) Office of Inspector General (OIG) in December issued a final rule modifying the safe harbors due to an ongoing shift from volume to value-based and patient-centered care sweeping industry, medical technology, and clinical care environments.
OIG added new safe harbors that protect certain payment practices and business arrangements from sanctions under the anti-kickback statute (section 1128B(b) of the Social Security Act). The rule also amends the civil monetary penalty (CMP) rules by codifying revisions to the definition of “remuneration,” added by the Balanced Budget Act (BBA) of 1997 and the Patient Protection and Affordable Care Act, Public Law 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010 (ACA).
Additionally, according to Powers Law, the OIG added a safe harbor to protect free or discounted local transportation offered to federal healthcare program beneficiaries, and introduced amendments to the civil monetary penalty (CMP) rules.
OIG then sought stakeholder input in the form of proposals and recommendations for consideration.
AdvaMed’s Legal Committee Working Group on Advancing Value-Based Health Care submitted proposals for two new safe harbors for value-based arrangements.
- The proposed value-based pricing arrangements safe harbor would allow for price adjustments, and for services to be bundled with the product being sold or leased, subject to appropriate safeguards, where the arrangement is dependent upon the achievement of a measurable clinical and/or cost outcome.
- The proposed value-based warranty safe harbor would allow manufacturers of products to make certain clinical and/or cost outcome assurances, and provide an appropriate remedy where such outcomes are not achieved.
Since "existing anti-kickback principles are simply outdated," AdvaMed believes that these new safe harbors "are necessary to give parties additional opportunities to engage in value-based arrangements, subject to appropriate protections to ensure that Federal health care programs are protected against waste, fraud, and abuse."
Adding these safe harbors would encourage “access, quality, patient choice, appropriate utilization and competition, while protecting against increased costs, inappropriate steering of patients, and harms associated with inappropriate incentives tied to referrals."
AdvaMed's 14-page submission details specific language the trade group proposes for OIG's consideration. The group also suggests, as an alternative, that OIG update the existing discount and warranty safe harbors. It also adds a discussion on a number of factors OIG could consider in reviewing solicited proposals and recommendations.