Source: https://www.natlawreview.com/article/hhs-proposes-changes-to-discount-safe-harbor-framework-to-realign-incentives-and-put
Timestamp: 2019-04-22 02:33:23+00:00

Document:
On February 6, 2019, the Department of Health and Human Services (HHS) published a Proposed Rule modifying the Anti-Kickback Statute safe harbor protection with the aim of lowering prescription pharmaceutical product prices and out-of-pocket costs for (primarily Medicare Part D [Part D] and Medicaid Managed Care Plan [Medicaid MCO]) consumers.1 With the Proposed Rule, HHS hopes to encourage medication manufacturers to pass discounts directly to consumers and develop a transparent framework for the prescription pharmaceutical product market. Comments on the Proposed Rule submitted to HHS by 5 p.m. EST on April 8, 2019 will be considered.
The federal Anti-Kickback Statute prohibits offering, paying, soliciting or receiving any “remuneration” in exchange for, or to induce, the referral of a patient for items or services covered by Medicare, Medicaid or another state healthcare program.2 The prohibition applies regardless of whether the remuneration is provided directly or indirectly, overtly or covertly, in cash or in kind. In addition, the Anti-Kickback Statute prohibits the solicitation or receipt of any remuneration in return for the activities described above.
The Anti-Kickback Statute provides that a violation of the statute is a felony punishable by imprisonment and significant fines, or both.3 The Medicare and Medicaid Patient and Program Protection Act of 1987 added the civil remedy of exclusion from participation in Medicare, Medicaid and other state healthcare programs for violations of the Anti-Kickback Statute. A defendant who has been found guilty of an offense described in any federal statute may be subject to a number of criminal and civil penalties.
The statute, according to HHS itself, is “extremely broad.” Not only does it prohibit kickbacks, bribes and other blatantly unethical means of inducing Medicare referrals, but it also covers a variety of financial arrangements that are common commercial practices and often benign in their effect.
Given the broad impact on discount and discount-like arrangements within the prescription pharmaceutical product supply chain and pricing industry, the Proposed Rule should be top of mind of industry stakeholders.
The Proposed Rule, if finalized, would affect the operations of entities that are involved in the distribution and reimbursement of prescription pharmaceutical products to Part D prescription drug benefit enrollees and Medicaid beneficiaries. In addition to private entities, the Proposed Rule would affect the operation of all state Medicaid agencies, including US territories. Manufacturers and health plans will need to evaluate the terms of current discount arrangements to ensure compliance of government and private pay plans with the revised anti-kickback safe harbors; and PBMs will need to develop compliance and transparency protocols to align the proposed safe harbors.
HHS is soliciting varied stakeholder feedback and comments on many aspects of its Proposed Rule. Comments must be submitted to HHS by 5 p.m. EST on by April 8, 2019.
2 42 U.S.C. § 1320a-7b(b).
3 42 U.S.C. § 1320a-7(b).
4 42 C.F.R. § 1001.952.
5 The “Discount Safe Harbor” is codified at 42 C.F.R. § 1001.952(h).
6 84 Fed. Reg. 2363 (Feb. 6, 2019) (to be codified at 42 C.F.R. § 1001.952(h)(5)-(10)).
7 84 Fed. Reg. 2363 (Feb. 6, 2019) (to be codified at 42 C.F.R. § 1001.952(cc)).
8 84 Fed. Reg. 2363 (Feb. 6, 2019) (to be codified at 42 C.F.R. § 1001.952(dd)).
9 84 Fed. Reg. 2363 (Feb. 6, 2019).
11 84 Fed. Reg. 2347 (Feb. 6, 2019).
13 84 Fed. Reg. 2348 (Feb. 6, 2019).
14 84 Fed. Reg. 2363 (Feb. 6, 2019).
16 84 Fed. Reg. 2349 (Feb. 6, 2019).
19 84 Fed. Reg. 2348 (Feb. 6, 2019).
20 84 Fed. Reg. 2363 (Feb. 6, 2019).
21 84 Fed. Reg. 2350 (Feb. 6, 2019).
22 84 Fed. Reg. 2363 (Feb. 6, 2019).
24 84 Fed. Reg. 2347-2349 (Feb. 6, 2019).
25 84 Fed. Reg. 2348 (Feb. 6, 2019).
26 84 Fed. Reg. 2344 (Feb. 6, 2019).
27 84 Fed. Reg. 2352 (Feb. 6, 2019).
28 84 Fed. Reg. 2353 (Feb. 6, 2019).
29 84 Fed. Reg. 2352 (Feb. 6, 2019).
30 84 Fed. Reg. 2340-2344 (Feb. 6, 2019).
31 84 Fed. Reg. 2351-2352 (Feb. 6, 2019).
John Wyand, a Partner in our Healthcare policy practice group in Washington DC, focuses on advising healthcare and life sciences companies and providers on legal, policy and regulatory issues. Additionally, he regularly assists hospitals and physician groups in developing strategies for hospital/physician alignment, mergers and acquisitions, and fraud and abuse compliance.
Robert has extensive experience counselling healthcare clients, including hospitals and health systems, physicians, physician groups, ambulatory surgery centers, insurers, health plans and management companies, in a variety of regulatory and transactional matters.
Robert’s areas of expertise include healthcare fraud and abuse laws, Medicare reimbursement issues, provider alignment strategies, provider enrollment, accreditation and licensure, Accountable Care Organizations, provider acquisitions and affiliations, healthcare antitrust matters, insurance regulation and healthcare transactional matters.
He is a member of the Ohio State Bar Associations and the American Health Lawyers Association.

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