What is Safe Harbor Healthcare Compliance?
The federal Anti-Kickback Statute (AKS) is a criminal law that prohibits the intentional payment of cash or other compensation, to induce or reward patient referrals or the generation of business involving items or services payable by Medicare or Medicaid. The law contains a “safe harbor exception.” Safe harbors are activities or arrangements in which the compensation arrangement is considered legal by the Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS). The issue of safe harbor healthcare compliance is discussed below.
What Is Safe Harbor Healthcare Compliance? Activities That are Legal
Since 1991, the Office of Inspector General (OIG) of HHS has periodically issued safe harbor regulations. The “safe harbor” regulations describe various payment and business practices that are not treated as offenses under the AKS.
Safe harbor healthcare compliance consists of recognizing and understanding the following safe harbors:
◈ A Bona Fide Employment Relationship: A bona fide, or legitimate, employment relationship, involves salary paid by an employer to an employee, who provides Medicare and Medicaid services. Since Medicare and Medicaid would not function unless doctors, staff, and suppliers were there to provide their services, this employment payment, although intentional, can generate Medicare and Medicaid business, and is legal.
◈ Personal Service Arrangements: Personal service arrangements (PSAs) are agreements under which someone called a principal assigns a task to someone called an agent. For example, a physician (the principal) may enter into an arrangement with someone with marketing skills (the agent) to assist the physician with marketing efforts. These kinds of jobs require that the agent have specialized skills. The work is typically not full-time, and is performed on an independent contractor basis. Provided the arrangement is written, signed, and lists all of the services the agent is to perform, the PSA will constitute a valid safe harbor.
◈ Lease or Rental of Office Space or Equipment: Medicare providers frequently share office space with other individuals who provide Medicare or Medicaid services. Providers may lease or rent this space, and may also lease or rent office equipment, to these other individuals. Leasing and rental of office space or equipment is considered a safe harbor, provided the lease or rental agreement is for a year or more, is written and signed, and indicates what office space or equipment is covered under the lease. The rental or lease costs must be charged at fair market rates.
◈ Group Purchasing Organizations: Group Purchasing Organizations, or GPOs, are entities created by a group of businesses to leverage their collective purchasing power. The purchasing power of the group as a whole allows the group to obtain discounts from vendors. Certain transactions between vendors and GPOs are considered to be safe harbors. To qualify as a safe harbor, the GPO must have a written agreement in place with the vendor, and the GPO must disclose information about the terms of the agreement to HHS.
Safe Harbor Healthcare Compliance: Are There Other Safe Harbors?
Additional safe harbors include:
◈ Investments in ambulatory surgical centers.
◈ Referral services such as vendor agreements.
◈ Discounts for buyers, sellers, and offers not acting as sellers.
◈ Practitioner recruitment.
◈ Investments in group practices and solo practices.
◈ Certain price reductions.
◈ Electronic health records items and services involving non-monetary goods and services.
Safe Harbor Healthcare Compliance: What are the Penalties for Violating the AKS?
Penalties and sanctions for violating the AKS include fines, jail terms, and exclusion from participation in Medicare and Medicaid. Doctors who pay or accept kickbacks face penalties of up to $50,000 per kickback plus three times the amount of the remuneration.
Safe harbor healthcare compliance protects providers from federal civil investigations and criminal prosecutions, as well as from civil money penalties and possible exclusion from participation in Medicare, Medicaid, and other federally funded health programs. While a failure to comply with all elements and criteria of an applicable safe harbor does not automatically render the arrangement illegal, deviations or departures from the terms of a safe harbor allows prosecutors greater discretion to investigate and potentially prosecute the individuals involved in the arrangement.