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[Federal Register Volume 69, Number 237 (Friday, December 10, 2004)]
[Proposed Rules]
[Pages 71766-71767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-27117]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of Inspector General

42 CFR Part 1001

Solicitation of New Safe Harbors and Special Fraud Alerts

AGENCY: Office of Inspector General (OIG), HHS.

ACTION: Notice of intent to develop regulations.

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SUMMARY: In accordance with section 205 of the Health Insurance 
Portability and Accountability Act (HIPAA) of 1996, this annual notice 
solicits proposals and recommendations for developing new and modifying 
existing safe harbor provisions under the Federal and State health care 
programs' anti-kickback statute (section 1128B(b) of the Social 
Security Act), as well as developing new OIG Special Fraud Alerts.

DATES: To assure consideration, public comments must be delivered to 
the address provided below by no later than 5 p.m. on February 8, 2005.

ADDRESSES: Please mail or deliver your written comments to the 
following address: Office of Inspector General, Department of Health 
and Human Services, Attention: OIG-91-N, Room 5246, Cohen Building, 330 
Independence Avenue, SW., Washington, DC 20201.
    We do not accept comments by facsimile (FAX) transmission. In 
commenting, please refer to file code OIG-91-N. Comments received 
timely will be available for public inspection as they are received, 
generally beginning approximately three weeks after publication of a 
document, in Room 5541 of the Office of Inspector General at 330 
Independence Avenue, SW., Washington, DC, on Monday through Friday of 
each week from 8 a.m. to 4:30 p.m.

FOR FURTHER INFORMATION CONTACT: Joel Schaer, (202) 619-0089, OIG 
Regulations Officer.

SUPPLEMENTARY INFORMATION:

I. Background

A. The OIG Safe Harbor Provisions

    Section 1128B(b) of the Social Security Act (the Act) (42 U.S.C. 
1320a-7b(b)) provides criminal penalties for individuals or entities 
that knowingly and willfully offer, pay, solicit or receive 
remuneration in order to induce or reward business reimbursable under 
the Federal health care programs. The offense is classified as a felony 
and is punishable by fines of up to $25,000 and imprisonment for up to 
5 years. The OIG may also impose civil money penalties, in accordance 
with section 1128A(a)(7) of the Act (42 U.S.C. 1320a-7a(a)(7)), or 
exclusion from the Federal health care programs, in accordance with 
section 1128(b)(7) of the Act (42 U.S.C. 1320a-7(b)(7)).
    Since the statute on its face is so broad, concern has been 
expressed for many years that some relatively innocuous commercial 
arrangements may be subject to criminal prosecution or administrative 
sanction. In response to the above concern, the Medicare and Medicaid 
Patient and Program Protection Act of 1987, section 14 of Public Law 
100-93, specifically required the development and promulgation of 
regulations, the so-called ``safe harbor'' provisions, specifying 
various payment and business practices which, although potentially 
capable of inducing referrals of business reimbursable under the 
Federal health care programs, would not be treated as criminal offenses 
under the anti-kickback statute and would not serve as a basis for 
administrative sanctions. The OIG safe harbor provisions have been 
developed ``to limit the reach of the statute somewhat by permitting 
certain non-abusive arrangements, while encouraging beneficial and 
innocuous arrangements''

[[Page 71767]]

(56 FR 35952, July 29, 1991). Health care providers and others may 
voluntarily seek to comply with these provisions so that they have the 
assurance that their business practices will not be subject to any 
enforcement action under the anti-kickback statute or related 
administrative authorities.
    To date, OIG has developed and codified in 42 CFR 1001.952 a total 
of 22 final safe harbors that describe practices that are sheltered 
from liability.

B. OIG Special Fraud Alerts

    The OIG has also periodically issued Special Fraud Alerts to give 
continuing guidance to health care providers with respect to practices 
OIG finds potentially fraudulent or abusive. The Special Fraud Alerts 
encourage industry compliance by giving providers guidance that can be 
applied to their own practices. The OIG Special Fraud Alerts are 
intended for extensive distribution directly to the health care 
provider community, as well as to those charged with administering the 
Federal health care programs.
    In developing these Special Fraud Alerts, OIG has relied on a 
number of sources and has consulted directly with experts in the 
subject field, including those within OIG, other agencies of the 
Department, other Federal and State agencies, and those in the health 
care industry. To date, OIG has issued 12 individual Special Fraud 
Alerts.

C. Section 205 of Public Law 104-191

    Section 205 of Public Law 104-191 requires the Department to 
develop and publish an annual notice in the Federal Register formally 
soliciting proposals for modifying existing safe harbors to the anti-
kickback statute and for developing new safe harbors and Special Fraud 
Alerts.
    In developing safe harbors for a criminal statute, OIG is required 
to engage in a thorough review of the range of factual circumstances 
that may fall within the proposed safe harbor subject area so as to 
uncover potential opportunities for fraud and abuse. Only then can OIG 
determine, in consultation with the Department of Justice, whether it 
can effectively develop regulatory limitations and controls that will 
permit beneficial and innocuous arrangements within a subject area 
while, at the same time, protecting the Federal health care programs 
and their beneficiaries from abusive practices.

II. Solicitation of Additional New Recommendations and Proposals

    In accordance with the requirements of section 205 of Public Law 
104-191, OIG last published a Federal Register solicitation notice for 
developing new safe harbors and Special Fraud Alerts on December 12, 
2003 (68 FR 69366). As required under section 205, a status report of 
the public comments received in response to that notice is set forth in 
Appendix G to the OIG's Semiannual Report covering the period April 1, 
2004 through September, 30, 2004.\1\ The OIG is not seeking additional 
public comment on the proposals listed in Appendix G at this time. 
Rather, this notice seeks additional recommendations regarding the 
development of proposed or modified safe harbor regulations and new 
Special Fraud Alerts beyond those summarized in Appendix G to the OIG 
Semiannual Report referenced above.
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    \1\ The OIG Semiannual Report can be accessed through the OIG 
Web site at http://oig.hhs.gov/publications/semiannual.html.
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Criteria for Modifying and Establishing Safe Harbor Provisions

    In accordance with section 205 of HIPAA, we will consider a number 
of factors in reviewing proposals for new or modified safe harbor 
provisions, such as the extent to which the proposals would affect an 
increase or decrease in--
     Access to health care services;
     The quality of services;
     Patient freedom of choice among health care providers;
     Competition among health care providers;
     The cost to Federal health care programs;
     The potential overutilization of the health care services; 
and
     The ability of health care facilities to provide services 
in medically underserved areas or to medically underserved populations.
    In addition, we will also take into consideration other factors, 
including, for example, the existence (or nonexistence) of any 
potential financial benefit to health care professionals or providers 
that may take into account their decisions whether to (1) order a 
health care item or service, or (2) arrange for a referral of health 
care items or services to a particular practitioner or provider.

Criteria for Developing Special Fraud Alerts

    In determining whether to issue additional Special Fraud Alerts, we 
will also consider whether, and to what extent, the practices that 
would be identified in a new Special Fraud Alert may result in any of 
the consequences set forth above, as well as the volume and frequency 
of the conduct that would be identified in the Special Fraud Alert.
    A detailed explanation of justifications for, or empirical data 
supporting, a suggestion for a safe harbor or Special Fraud Alert would 
be helpful and should, if possible, be included in any response to this 
solicitation.

    Dated: November 24, 2004.
Daniel R. Levinson,
Acting Inspector General.
[FR Doc. 04-27117 Filed 12-9-04; 8:45 am]
BILLING CODE 4150-04-P
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