[Federal Register Volume 79, Number 192 (Friday, October 3, 2014)]
[Proposed Rules]
[Pages 59717-59733]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-23182]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of Inspector General

42 CFR Parts 1001 and 1003

RIN 0936-AA06


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

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend the safe harbors to the anti-
kickback statute and the civil monetary penalty (CMP) rules under the 
authority of the Office of Inspector General (OIG). The proposed rule 
would add new safe harbors, some of which codify statutory changes set 
forth in the Medicare Prescription Drug, Improvement, and Modernization 
Act of 2003 (MMA) 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, Public Law 111-152, 124 Stat. 
1029 (2010) (ACA), and all of which would protect certain payment 
practices and business arrangements from criminal prosecution or civil 
sanctions under the anti-kickback statute. We also propose to codify 
revisions to the definition of ``remuneration,'' added by the Balanced 
Budget Act (BBA) of 1997 and ACA, and add a gainsharing CMP provision 
in our regulations.

DATES: To ensure consideration, comments must be delivered to the 
address provided below by no later than 5 p.m. Eastern Standard Time on 
December 2, 2014.

ADDRESSES: In commenting, please reference file code OIG-403-P3. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission. However, you may submit comments using 
one of three ways (no duplicates, please):
    1. Electronically. You may submit electronically through the 
Federal eRulemaking Portal at http://www.regulations.gov. (Attachments 
should be in Microsoft Word, if possible.)
    2. By regular, express, or overnight mail. You may mail your 
printed or written submissions to the following address:

    Patrice Drew, Office of Inspector General, Department of Health 
and Human Services, Attention: OIG-403-P, Room 5269, Cohen Building, 
330 Independence Avenue SW., Room 5269, Washington, DC 20201.

    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By hand or courier. You may deliver, by hand or courier, before 
the close of the comment period, your printed or written comments to:

    Patrice Drew, Office of Inspector General, Department of Health 
and Human Services, Cohen Building, 330 Independence Avenue SW., 
Room 5269, Washington, DC 20201.

    Because access to the interior of the Cohen Building is not readily 
available to persons without Federal Government identification, 
commenters are encouraged to schedule their delivery with one of our 
staff at (202) 619-1368.
    Inspection of Public Comments: All comments received before the end 
of the comment period will be posted on http://www.regulations.gov for 
public viewing. Hard copies will also be available for public 
inspection at the Office of Inspector General, Department of Health and 
Human Services, Cohen Building, 330 Independence Avenue SW., 
Washington, DC 20201, Monday through Friday from 8:30 a.m. to 4 p.m. To 
schedule an appointment to view public comments, phone (202) 619-1368.

FOR FURTHER INFORMATION CONTACT: Heather Westphal, Office of Counsel to 
the Inspector General, (202) 619-0335, for questions relating to the 
proposed rule.

Executive Summary

A. Need For Regulatory Action

    MMA and ACA include exceptions to the anti-kickback statute, and 
BBA of 1997 and ACA include exceptions to the definition of 
``remuneration'' under the civil monetary penalties law. OIG proposes 
to codify those changes here. At the same time, OIG proposes additional 
changes to make technical corrections to an existing regulation and 
proposes new safe harbors to the anti-

[[Page 59718]]

kickback statute to protect certain services that the industry has 
expressed an interest in offering and that we believe could be, if 
properly structured and with appropriate safeguards, low risk to 
Federal health care programs. Finally, the civil monetary penalties law 
includes a gainsharing CMP provision that has yet to be codified in 
regulations. We propose to interpret and codify that provision in this 
proposed rule.

B. Summary of Major Provisions

1. Anti-Kickback Statute and Safe Harbors
    We propose to amend 42 CFR 1001.952 by modifying certain existing 
safe harbors to the anti-kickback statute and by adding safe harbors 
that provide new protections or codify certain existing statutory 
protections. These changes include:
     A technical correction to the existing safe harbor for 
referral services;
     protection for certain cost-sharing waivers, including:
     Pharmacy waivers of cost-sharing for financially needy 
Medicare Part D beneficiaries; and
     waivers of cost-sharing for emergency ambulance services 
furnished by State- or municipality-owned ambulance services;
     protection for certain remuneration between Medicare 
Advantage organizations and federally qualified health centers;
     protection for discounts by manufacturers on drugs 
furnished to beneficiaries under the Medicare Coverage Gap Discount 
Program; and
     protection for free or discounted local transportation 
services that meet specified criteria.
2. Civil Monetary Penalty Authorities
    We propose to amend the definition of ``remuneration'' in the CMP 
regulations at 42 CFR 1003 by adding certain statutory exceptions for:
     Copayment reductions for certain hospital outpatient 
department services;
     certain remuneration that poses a low risk of harm and 
promotes access to care;
     coupons, rebates, or other retailer reward programs that 
meet specified requirements;
     certain remuneration to financially needy individuals; and
     copayment waivers for the first fill of generic drugs.
    We also propose to codify the gainsharing CMP set forth in section 
1128A(b) of the Social Security Act (the Act) (42 U.S.C. 1320a-7a(b)).

C. Costs and Benefits

    There are no significant costs associated with the proposed 
regulatory revisions that would impose any mandates on State, local, or 
tribal governments or on the private sector.

SUPPLEMENTARY INFORMATION: This notice of proposed rulemaking is part 
of a rulemaking that was identified in the Unified Agenda by the title 
``Medicare and State Health Care Programs: Fraud and Abuse; Revisions 
to the Office of Inspector General's Safe Harbors Under the Anti-
Kickback Statute, Exclusion Authorities, and Civil Monetary Penalty 
Rules.'' OIG has proposed additional rulemaking in the following areas: 
CMP authorities (42 CFR part 1003); inflation adjustment for CMPs (42 
CFR part 1003); and exclusion authorities and the duties and 
responsibilities of State Medicaid Fraud Control Units (MFCUs) 42 CFR 
parts 1000, 1001, 1002, and 1006. Each of the proposed rules is a 
stand-alone, independent rule, and thus, one can comment meaningfully 
on this proposed rule independent of the proposed rules concerning CMP 
authorities, inflation adjustment for CMPs, exclusion authorities, or 
authorities and duties of the MFCUs.

I. Background

A. Anti-Kickback Statute and Safe Harbors

    Section 1128B(b) of the Act (42 U.S.C. 1320a-7b(b), the anti-
kickback statute) provides criminal penalties for individuals or 
entities that knowingly and willfully offer, pay, solicit, or receive 
remuneration in order to induce or reward the referral of business 
reimbursable under Federal health care programs, as defined in section 
1128B(f) of the Act. The offense is classified as a felony and is 
punishable by fines of up to $25,000 and imprisonment for up to 5 
years. Violations may also result in the imposition of CMPs under 
section 1128A(a)(7) of the Act (42 U.S.C. 1320a-7a(a)(7)), program 
exclusion under section 1128(b)(7) of the Act (42 U.S.C. 1320a-
7(b)(7)), and liability under the False Claims Act (31 U.S.C. 3729-33).
    The types of remuneration covered specifically include, without 
limitation, kickbacks, bribes, and rebates, whether made directly or 
indirectly, overtly or covertly, in cash or in kind. In addition, 
prohibited conduct includes not only the payment of remuneration 
intended to induce or reward referrals of patients, but also the 
payment of remuneration intended to induce or reward the purchasing, 
leasing, or ordering of, or arranging for or recommending the 
purchasing, leasing, or ordering of, any good, facility, service, or 
item reimbursable by any Federal health care program.
    Because of the broad reach of the statute, concern was expressed 
that some relatively innocuous commercial arrangements were covered by 
the statute and, therefore, potentially subject to criminal 
prosecution. In response, Congress enacted section 14 of the Medicare 
and Medicaid Patient and Program Protection Act of 1987, Public Law 
100-93 (section 1128B(b)(3)(E) of the Act), which specifically requires 
the development and promulgation of regulations, the so-called safe 
harbor provisions, that would specify various payment and business 
practices that would not be treated as criminal offenses under the 
anti-kickback statute, even though they may potentially be capable of 
inducing referrals of business under the Federal health care programs.
    Section 205 of the Health Insurance Portability and Accountability 
Act of 1996, Public Law 104-191, established section 1128D of the Act, 
which includes criteria for modifying and establishing safe harbors. 
Specifically, section 1128D(a)(2) of the Act provides that, in 
modifying and establishing safe harbors, the Secretary of Health and 
Human Services (Secretary) may consider whether a specified payment 
practice may result in:
     An increase or decrease in access to health care services;
     an increase or decrease in the quality of health care 
services;
     an increase or decrease in patient freedom of choice among 
health care providers;
     an increase or decrease in competition among health care 
providers;
     an increase or decrease in the ability of health care 
facilities to provide services in medically underserved areas or to 
medically underserved populations;
     an increase or decrease in the cost to Federal health care 
programs;
     an increase or decrease in the potential overutilization 
of health care services;
     the existence or nonexistence of any potential financial 
benefit to a health care professional or provider, which benefit may 
vary depending on whether the health care professional or provider 
decides to order a health care item or service or arrange for a 
referral of health care items or services to a particular practitioner 
or provider;
     any other factors the Secretary deems appropriate in the 
interest of preventing fraud and abuse in Federal health care programs.
    Since July 29, 1991, we have published in the Federal Register a

[[Page 59719]]

series of final regulations establishing safe harbors in various 
areas.\1\ These provisions have been developed ``to limit the reach of 
the statute somewhat by permitting certain non-abusive arrangements, 
while encouraging beneficial or innocuous arrangements.'' (56 FR 35952, 
35958 (July 29, 1991).) Many of the safe harbors create new exemptions, 
while other safe harbors interpret exceptions already promulgated by 
statute.
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    \1\ 56 FR 35952 (July 29, 1991); 61 FR 2122 (Jan. 25, 1996); 64 
FR 63518 (Nov. 19, 1999); 64 FR 63504 (Nov. 19, 1999); 66 FR 62979 
(Dec. 4, 2001); 71 FR 45110 (Aug. 8, 2006); and 72 FR 56632 (Oct. 4, 
2007).
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    Health care providers and others may voluntarily seek to comply 
with safe harbors so that they have the assurance that their business 
practices will not be subject to enforcement action under the anti-
kickback statute, the CMP provision for anti-kickback violations, or 
the program exclusion authority related to kickbacks. We note, however, 
that compliance with a safe harbor insulates an individual or entity 
from liability under the anti-kickback statute and the beneficiary 
inducements CMP \2\ only; individuals and entities remain responsible 
for complying with all other laws, regulations, and guidance that apply 
to their businesses. In authorizing the Department of Health and Human 
Services (Department or HHS) to protect certain arrangements and 
payment practices under the anti-kickback statute, Congress intended 
the safe harbor regulations to be updated periodically to reflect 
changing business practices and technologies in the health care 
industry.
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    \2\ Pursuant to section 1128A(i)(6)(B), any practice permissible 
under the anti-kickback statute, whether through statutory exception 
or regulations issued by the Secretary, is also excepted from the 
beneficiary inducements CMP.
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    Section 101 of MMA added a new section 1860D to the Act, 
establishing the Part D prescription drug benefit in the Medicare 
program. Section 101(e) of MMA amends section 1128B(b)(3) of the Act to 
permit pharmacies to waive or reduce cost-sharing imposed under Part D 
as long as specified conditions are met. In addition, section 237 of 
MMA added an exception to permit certain remuneration between Medicare 
Advantage organizations and federally qualified health centers.
    ACA also includes a number of provisions that could affect 
liability under the anti-kickback statute. Section 3301 of ACA 
establishes the Medicare Coverage Gap Discount Program, codified at new 
section 1860D-14A of the Act (42 U.S.C. 1395w-114A). Pursuant to this 
program, prescription drug manufacturers have entered into agreements 
with the Secretary to provide certain beneficiaries access to discounts 
on drugs at the point of sale. Section 3301(d) of ACA amends the anti-
kickback statute to protect the discounts provided for under the 
Medicare Coverage Gap Discount Program.
    We are proposing to incorporate into our regulations safe harbors 
for payment and business practices permitted under MMA and ACA, as well 
as proposing new safe harbors pursuant to our authority under section 
14 of the Medicare and Medicaid Patient and Protection Act of 1987 to 
protect practices that we view as posing a low risk to Federal health 
care programs as long as specified conditions are met.

B. Civil Monetary Penalty Authorities

1. Overview of OIG Civil Monetary Penalty Authorities
    In 1981, Congress enacted the CMP law, section 1128A of the Act, as 
one of several administrative remedies to combat fraud and abuse in 
Medicare and Medicaid. The law authorized the Secretary to impose 
penalties and assessments on persons who defrauded Medicare or Medicaid 
or engaged in certain other wrongful conduct. The CMP law also 
authorized the Secretary to exclude persons from Federal health care 
programs (as defined in section 1128B(f)(1) of the Act) and to direct 
the appropriate State agency to exclude the person from participating 
in any State health care programs (as defined in section 1128(h) of the 
Act). Congress later expanded the CMP law and the scope of exclusion to 
apply to all Federal health care programs, but the CMP applicable to 
beneficiary inducements remains limited to Medicare and State health 
care program beneficiaries. The Secretary delegated the law's CMP 
authorities to OIG. 53 FR 12993 (April 20, 1988). Since 1981, Congress 
has created various other CMP authorities covering numerous types of 
fraud and abuse, many of which were also delegated by the Secretary to 
OIG.
2. The Definition of ``Remuneration''
    The BBA of 1997 and section 6402(d)(2)(B) of ACA amended the 
definition of ``remuneration'' for purposes of the beneficiary 
inducements CMP at section 1128A(a)(5) of the Act, as discussed below. 
We propose to incorporate these changes into the definition of 
``remuneration'' under proposed Sec.  1003.110 \3\ (current Sec.  
1003.101).
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    \3\ The Secretary proposed a reorganization of Part 1003. See 
Notice of Proposed Rulemaking RIN 0936-AA04, Medicare and State 
Health Care Programs: Fraud and Abuse; Revisions to the Office of 
Inspector General's Civil Monetary Penalty Rules, published on May 
12, 2014 (79 FR 27080) (CMP NPRM); this proposed rule uses the 
section designations proposed in the CMP NPRM, together with current 
section numbers.
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3. The Gainsharing CMP
    Public Law 99-509, the Omnibus Budget Reconciliation Act (OBRA) of 
1986, authorized the Secretary to impose CMPs for certain incentive 
payments made to physicians by hospitals, risk-sharing health 
maintenance organizations (HMOs), and competitive medical plans. Over 
time, this provision, section 1128A(b) of the Act (the Gainsharing 
CMP), has been amended to repeal the provisions relating to HMOs and 
other risk-sharing entities and to make various other changes in 
terminology.\4\ See section 6003(g)(3) of Public Law 101-239, OBRA of 
1989; section 4204(a)(3) and 4731(b) of Public Law 101-508, OBRA of 
1990; and section 4201(c) of the BBA of 1997.
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    \4\ Requirements relating to physician incentive plans in HMOs 
and other risk-sharing entities are now set forth in section 1876(i) 
of the Act.
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    Section 1128A(b)(1) prohibits a hospital or a critical access 
hospital from knowingly making a payment, directly or indirectly, to a 
physician as an inducement to reduce or limit services provided to 
Medicare or Medicaid beneficiaries who are under the direct care of the 
physician. A hospital or a critical access hospital that makes such 
payment and the physician who knowingly accepts such payment are 
subject to CMPs of not more than $2,000 for each beneficiary for whom 
the payment is made.

II. Provisions of the Proposed Rule

A. Anti-Kickback Statute and Safe Harbors

    Below is a description of the additional payment practices that we 
are proposing to incorporate under 42 CFR 1001.952 pursuant to the 
authorities cited under each heading and the rationale for their 
inclusion in this proposed rulemaking. Consistent with the criteria set 
forth in section 1128D(a)(2) for modifying and establishing safe 
harbors, our goal is to protect beneficial arrangements that enhance 
the efficient and effective delivery of health care and promote the 
best interests of patients, while also protecting the Federal health 
care programs and beneficiaries from undue risk of harm associated with 
referral payments. We seek to strike an appropriate balance between 
protections for beneficial arrangements and safeguards to prevent 
unscrupulous

[[Page 59720]]

individuals and entities from taking advantage of the safe harbors to 
increase costs to programs and patients or compromise quality of care. 
We seek comments on how best to do this with respect to all of our 
proposals below.
1. Referral Services
    We propose to make a technical correction to the safe harbor for 
referral services, found at 42 CFR 1001.952(f). This safe harbor 
originally required that any fee a referral service charged a 
participant be ``based on the cost of operating the referral service, 
and not on the volume or value of any referrals to or business 
otherwise generated by the participants for the referral service * * 
*''. This language created an unintended ambiguity, such that the safe 
harbor could have been viewed as permitting referral services to adjust 
their fees on the basis of the volume of referrals they make to the 
participants. In 1999, we finalized a modification to the language to 
clarify that the safe harbor precludes protection for payments from 
participants to referral services that are based on the volume or value 
of referrals to, or business otherwise generated by, either party for 
the other party. See 64 FR 63518, 63526 (Nov. 19, 1999). During 
subsequent revisions to the safe harbor by which we intended to make a 
technical correction clarifying that OIG's exclusion authority applied 
to all Federal health care programs rather than only to Medicare and 
State health care programs, the language in Sec.  1001.952(f)(2) 
inadvertently was changed to ``* * * or business otherwise generated by 
either party for the referral service * * *.'' See 67 FR 11928, 11929 
and 11934 (Mar. 18, 2002). Therefore, we propose to make a technical 
correction and revert to the language in the 1999 final rule cited 
above.
2. Cost-Sharing Waivers
    Generally, the reduction or waiver of Medicare or other Federal 
health care program cost-sharing amounts may implicate the anti-
kickback statute. Our concern about potentially abusive waivers of 
cost-sharing amounts under the anti-kickback statue is longstanding. 
For example, we have previously stated that providers and suppliers 
that routinely waive Medicare cost-sharing amounts for reasons 
unrelated to individualized, good faith assessments of financial 
hardship may be held liable under the anti-kickback statute. See e.g., 
Special Fraud Alert, 59 FR 65372, 65374 (Dec. 19, 1994). Such waivers 
may constitute prohibited remuneration to induce referrals under the 
anti-kickback statute, as well as violations of the CMP prohibition 
against inducements to beneficiaries, found in section 1128A(a)(5) of 
the Act. We propose to modify Sec.  1001.952(k) by adding two new 
subparagraphs to protect certain cost-sharing waivers that pose a low 
risk of harm and make technical corrections to the introductory 
language to account for new subparagraphs. In addition, we note that 
subparagraph (k) is limited to reductions or waivers of Medicare and 
State health care program beneficiary cost-sharing. We are considering 
and solicit comments about expanding this safe harbor to protect 
waivers under all Federal health care programs, if applicable, and 
subject to each of the paragraphs below.

Part D Cost-Sharing Waivers by Pharmacies

    As noted in section I.A above, MMA specifically amended section 
1128B(b)(3) of the Act by adding a new subparagraph (G) that excepts 
from liability under the anti-kickback statute waivers or reductions by 
pharmacies (including pharmacies of the Indian Health Service, Indian 
tribes, tribal organizations, and urban Indian organizations) of any 
cost-sharing imposed under Medicare Part D, as long as certain 
conditions are met. These conditions are specified in clauses (i) 
through (iii) of section 1128A(i)(6)(A) of the Act, and we propose to 
interpret them consistent with our regulations interpreting these 
conditions in paragraph (1) of the definition of ``remuneration'' at 
Sec.  1003.101.
    We propose to add a new Sec.  1001.952(k)(3) reflecting this 
exception to the anti-kickback statute. Thus, consistent with the 
statute, a pharmacy waiving Part D cost-sharing qualifies for safe 
harbor protection if: (1) The waiver or reduction is not advertised or 
part of a solicitation; (2) the pharmacy does not routinely waive the 
cost-sharing; and (3) before waiving the cost-sharing, the pharmacy 
either determines in good faith that the beneficiary has a financial 
need or the pharmacy fails to collect the cost-sharing amount after 
making a reasonable effort to do so. If, however, the waiver or 
reduction of cost-sharing is made on behalf of a subsidy-eligible 
individual (as defined in section 1860D-14(a)(3) of the Act), then 
conditions (2) and (3) above are not required. We reiterate, however, 
that compliance with the conditions of this safe harbor, as with all 
safe harbors, protects a individual or an entity from liability only 
under the anti-kickback statute and the beneficiary inducements CMP, 
pursuant to section 1128A(i)(6)(B) of the Act. Providers, 
practitioners, and suppliers still must comply with other laws, 
regulations, and Centers for Medicare & Medicaid Services (CMS) program 
rules.

Cost-Sharing Waivers for Emergency Ambulance Services

    Over the years, we have received many advisory opinion requests 
concerning the reduction or waiver of coinsurance or deductible amounts 
owed for emergency ambulance services to an ambulance supplier that is 
owned and operated by a State or a political subdivision of a State, 
resulting in many favorable advisory opinions (that is, approving of 
such arrangements). Notwithstanding the vast body of favorable advisory 
opinions, we continue to receive similar requests for advisory opinions 
each year. In light of this, pursuant to our authority under section 
1128B(b)(3)(E) of the Act, we propose to establish a safe harbor to 
protect those reductions or waivers that meet all the conditions 
enumerated in Sec.  1001.952(k)(4).
    First, we propose to require that the ambulance provider or 
supplier be owned and operated by a State, a political subdivision of a 
State, or a federally recognized Indian tribe \5\ and be the Medicare 
Part B provider or supplier of the emergency ambulance services. We 
note that items and services that are paid for directly or indirectly 
by a government entity (i.e., ``free services'') generally are not 
reimbursable by Medicare,\6\ so we also propose to limit the safe 
harbor protection to situations in which a provider's or supplier's 
reduction or waiver of coinsurance or deductible is not considered to 
be the furnishing of services paid for directly or indirectly by a 
government entity, subject to applicable exceptions promulgated by CMS. 
CMS has explained that certain cost-sharing waivers do not constitute 
the provision of free services:
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    \5\ Section 104 of the Federally Recognized Indian Tribe List 
Act of 1994, Public Law 103-454, 108 Stat. 4791, requires the 
Secretary to publish a list of all federally recognized Indian 
tribes on an annual basis.
    \6\ See 42 CFR Sec.  411.8.

    A [State or local government] facility which reduces or waives 
its charges for patients unable to pay, or charges patients only to 
the extent of their Medicare and other health insurance coverage, is 
not viewed as furnishing free services and may therefore receive 
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program payment.\7\

    \7\ CMS Medicare Benefit Policy Manual, Pub. No. 100-02, ch. 16, 
Sec.  50.3.1.

    Notwithstanding the use of the term ``facility,'' CMS has confirmed 
that this provision would apply to an ambulance provider or supplier 
that was owned

[[Page 59721]]

and operated by a State or a political subdivision of a State and that 
was the Medicare Part B provider or supplier of the emergency ambulance 
services.
    We also would require that the ambulance provider or supplier offer 
the reduction or waiver on a uniform basis, without regard to patient-
specific factors. In addition, we propose to include an express 
prohibition against claiming the amount reduced or waived as bad debt 
for payment purposes under Medicare or a State health care program or 
otherwise shifting the burden of the reduction or waiver onto Medicare, 
a State health care program, other payers, or individuals. We solicit 
comments on these proposed conditions.
    For purposes of this safe harbor, we plan to interpret the term 
``ambulance provider or supplier'' as a provider or supplier of 
ambulance transport services that furnishes emergency ambulance 
services. The term would not include a provider or supplier of 
ambulance transport services that furnishes only nonemergency transport 
services, because the safe harbor would only apply to the waiver of 
cost-sharing in connection with emergency ambulance services. We plan 
to interpret ``emergency ambulance services'' in a manner consistent 
with the definition given to that term in 42 CFR 1001.952(v)(4)(iv). We 
solicit comments on this interpretation and on whether these terms need 
to be expressly defined in the regulatory text of this safe harbor.
    Finally, we are considering whether to include reductions or 
waivers of cost-sharing amounts owed under other Federal health care 
programs (e.g., Medicaid) in the safe harbor. We solicit comments on 
this consideration, and on what additional or different safeguards, if 
any, might be required to protect against fraud, waste, and abuse.
    This safe harbor would apply only to situations in which the 
governmental unit owns and operates the ambulance provider or supplier; 
it would not apply to contracts with outside ambulance providers or 
suppliers. For example, if a municipality contracted with an outside 
ambulance provider or supplier for rendering services to residents of 
its service area, the municipality could not require the ambulance 
provider or supplier to waive the collection from beneficiaries of out-
of-pocket cost-sharing amounts unless the municipality paid the cost-
sharing amounts owed or otherwise made provisions for paying them.
3. Federally Qualified Health Centers and Medicare Advantage 
Organizations
    An individual enrolled in a Medicare Advantage (MA) plan may 
receive services from a federally qualified health center (FQHC) that 
has a written agreement with the MA plan. Section 237 of MMA amended 42 
U.S.C. 1395w-27(e) by adding a new paragraph (3) regarding agreements 
between MA organizations and FQHCs. This new paragraph requires that 
the written agreement between the two entities specifically provide 
that the MA organization will pay the contracting FQHC no less than the 
level and amount of payment that the plan would make for the same 
services if the services were furnished by another type of entity. 
Section 237 also added a new statutory exception to the anti-kickback 
statute at section 1128B(b)(3)(H) of the Act (42 U.S.C. 1320a-
7b(b)(3)(H)). This exception protects ``any remuneration between a 
federally qualified health center (or an entity controlled by such a 
health center) and an MA organization pursuant to a written agreement 
described in section 1853(a)(4) [of the Act].'' \8\ We propose to 
incorporate this exception into the safe harbor regulations as new 
section 42 CFR 1001.952(z) and solicit comments on this proposal.
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    \8\ Section 1853(a)(4) of the Act (42 U.S.C. 1395w-23(a)(4)) 
generally describes the payment rule for FQHCs that provide services 
to patients enrolled in MA plans that have an agreement with the 
FQHC, including agreements required under 42 U.S.C. 1395w-27(e)(3).
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4. Medicare Coverage Gap Discount Program
    Section 3301 of ACA establishes the Medicare Coverage Gap Discount 
Program, codified at section 1860D-14A of the Act. Under this program, 
prescription drug manufacturers enter into an agreement with the 
Secretary to provide certain beneficiaries access to discounts on drugs 
at the point of sale.
    Section 3301(d) of ACA amends the anti-kickback statute by adding a 
new subparagraph (J) to section 1128B(b)(3) of the Act to protect the 
discounts provided for under the Medicare Coverage Gap Discount 
Program. To codify this self-implementing exception in our regulations, 
this proposed rule would add a new paragraph (aa) to the existing safe 
harbor regulations at 42 CFR 1001.952.
    This new paragraph (aa) would protect a discount in the price of an 
``applicable drug'' of a manufacturer that is furnished to an 
``applicable beneficiary'' under the Medicare Coverage Gap Discount 
Program under section 1860D-14A, as long as the manufacturer 
participates in, and is in full compliance with all requirements of, 
the Medicare Coverage Gap Discount Program. The proposed regulation 
would incorporate by reference the following definitions of the terms 
``applicable beneficiary'' and ``applicable drug'' which were added by 
a new section 1860D-14A(g) of the Act:

    Applicable beneficiary means an individual who, on the date of 
dispensing a covered part D drug--
    (A) is enrolled in a prescription drug plan or [a Medicare 
Advantage Prescription Drug (MA-PD)] plan;
    (B) is not enrolled in a qualified retiree prescription drug 
plan;
    (C) is not entitled to an income-related subsidy under section 
1860D-14(a); and
    (D) who--
    (i) has reached or exceeded the initial coverage limit under 
section 1860D-2(b)(3) during the year; and
    (ii) has not incurred costs for covered part D drugs in the year 
equal to the annual out-of-pocket threshold specified in section 
1860D-2(b)(4)(B).
    Applicable drug means, with respect to an applicable 
beneficiary, a covered part D drug--
    (A) approved under a new drug application under section 505(b) 
of the Federal Food, Drug, and Cosmetic Act or, in the case of a 
biologic product, licensed under section 351 of the Public Health 
Service Act (other than a product licensed under subsection (k) of 
such section 351); and
    (B)(i) if the sponsor of the prescription drug plan or the MA 
organization offering the MA-PD plan uses a formulary, which is on 
the formulary of the prescription drug plan or MA-PD plan that the 
applicable beneficiary is enrolled in;
    (ii) if the [prescription drug plan (PDP)] sponsor of the 
prescription drug plan or the MA organization offering the MA-PD 
plan does not use a formulary, for which benefits are available 
under the prescription drug plan or MA-PD plan that the applicable 
beneficiary is enrolled in; or
    (iii) is provided through an exception or appeal.
5. Local Transportation
    Pursuant to our authority at section 1128B(b)(3)(E) of the Act, we 
propose to establish a new safe harbor at 42 CFR 1001.952(bb) to 
protect free or discounted local transportation services provided to 
Federal health care program beneficiaries. We explored this issue in 
the context of section 1128A(a)(5) in the past. According to the Act's 
legislative history, in enacting section 1128A(a)(5) of the Act, 
Congress intended that the statute not preclude the provision of 
complimentary local transportation of nominal value (H.R. Conf. Rep. 
No. 104-736 at 255 (1996)). We have interpreted ``nominal value'' to 
mean no more than $10 per item or service or $50 in the aggregate over 
the course of a year. (See 65 FR 24400, 24411; April 6, 2000.) As we 
previously indicated, we were concerned that this interpretation may be 
overly restrictive in the context of complimentary local 
transportation.

[[Page 59722]]

Accordingly, we solicited public input on a number of issues as they 
related to a possible exception to section 1128A(a)(5) of the Act (via 
1128A(i)(6)) for complimentary local transportation. (67 FR 72892; Dec. 
9, 2002) (2002 Solicitation). However, ultimately we did not propose or 
finalize an exception for complimentary local transportation.
    On the basis of our experience in the years since the 2002 
Solicitation and our continued concern that our interpretation of 
``nominal value'' in the context of complimentary local transportation 
may be overly restrictive, we are proposing a safe harbor to the anti-
kickback statute to protect not only certain free local transportation 
but also discounted local transportation that meets certain conditions. 
As explained above, by operation of section 1128A(i)(6)(B), practices 
permissible under the safe harbor would also be excepted from the 
definition of ``remuneration'' in section 1128A(i)(6) of the Act.
    The proposed safe harbor would protect free or discounted local 
transportation made available to established patients (and, if needed, 
a person to assist the patient) to obtain medically necessary items and 
services. We also seek comments on a second format of transportation 
that would be akin to a shuttle service. We are mindful that certain 
types of entities may have legitimate financial and patient care 
interests in the provision of local transportation to patients and that 
such transportation could, depending on the circumstances, benefit 
Federal health care programs through reduced costs and Federal 
beneficiaries through better care, access, and convenience. In an 
effort to foster these beneficial arrangements without permitting 
arrangements that negatively impact beneficiaries or Federal health 
care programs, the safe harbor would impose a number of conditions on 
protected free or discounted local transportation services as set forth 
below.
    (1) We propose to require that the free or discounted local 
transportation services be available only to established patients (as 
described in greater detail below) and be determined in a manner 
unrelated to the past or anticipated volume or value of Federal health 
care program business. This requirement is intended to reduce the risk 
that a health care provider or supplier could use a transportation 
program for the purpose of increasing business by transporting patients 
to its own premises or for the purpose of inappropriately inducing 
referrals from other providers or suppliers by transporting patients to 
theirs. We propose and solicit comments on a number of safeguards and 
limitations related to this proposed condition.
    (a) We propose that the safe harbor protect free or discounted 
local transportation offered or provided by any individual or entity, 
except as provided below (for purposes of this safe harbor, an 
``Eligible Entity''), subject to meeting all proposed safeguards 
herein. The term ``Eligible Entity'' in the proposed safe harbor would 
not include individuals and entities (or family members or others 
acting on their behalf) that primarily supply health care items 
(including, but not limited to durable medical equipment (DME) 
suppliers or pharmaceutical companies) because we believe that there 
may be additional risk that these types of entities, which are heavily 
dependent upon practitioner prescriptions and referrals, would use 
transportation arrangements to generate business for themselves by 
steering transported patients to those who order their products. 
Moreover, these suppliers and manufacturers do not have the broader 
patient care responsibilities that, for example, hospitals, health 
systems, clinics, and physicians have, and thus they would seem to have 
less need to engage in free or discounted local transportation 
arrangements. We have similar concerns about the laboratory industry 
even though laboratories furnish services rather than items. Thus, we 
propose to exclude laboratories from the definition of ``Eligible 
Entity'' and solicit comments on that proposal.
    For the same and other reasons, we are considering and solicit 
comments on whether certain other types of providers, suppliers of 
services, or other entities should be excluded, completely or 
partially, from protection as an Eligible Entity. In the context of 
partially limiting protection as an Eligible Entity, we are considering 
and seek comments on whether certain types of health care providers or 
suppliers of services should not be protected when they provide free or 
discounted local transportation to other health care providers or 
suppliers who refer to them. For example, our oversight experience 
suggests that overutilization may be occurring in the home health 
industry. We are concerned that protecting the provision of free or 
discounted local transportation by home health care providers to 
physician offices that are actual or potential referral sources might 
result in both steering (inducing the physician to refer to that 
particular home health care provider) and overutilization in the form 
of unnecessary physician visits or unnecessary home health care 
prescriptions. To address this concern, we are considering excluding 
home health care providers from safe harbor protection when they 
furnish free or discounted local transportation to their referral 
sources (but not excluding them from protection when they provide such 
transportation to non-referral sources, such as pharmacies). We also 
solicit comments on whether home health agencies should be excluded 
from the definition of ``Eligible Entity'' entirely.
    At this time, we propose that the safe harbor criteria apply 
equally to all Eligible Entities offering the eligible forms of free or 
discounted local transportation services. In addition to considering 
whether to exclude certain types of providers or suppliers of services 
from protection as described above, we are also considering and solicit 
comments on whether there should be additional safeguards depending on 
the type of Eligible Entity offering the transportation services and, 
if so, what types of safeguards could be included to protect beneficial 
free or discounted local transportation arrangements while at the same 
time preventing abuses, such as overutilization, improper patient 
steering, or use of free or discounted local transportation to generate 
referrals, either referrals initiated by the transported patient or 
referrals from providers and others to whom the patients are 
transported.
    (b) We propose and solicit comments on limiting safe harbor 
protection to free or discounted local transportation offered to 
established patients. Thus, for example, once a patient has selected an 
oncology practice and has attended an appointment with a physician in 
the group, the physician could offer transportation assistance to the 
patient who might have trouble reliably attending appointments for 
chemotherapy. However, safe harbor protection would not be available to 
a practice that offers or provides free or discounted transportation to 
new patients.
    (c) We propose to allow free or discounted local transportation 
services to the premises of a health care provider or supplier, subject 
to certain limitations that we believe would reduce the risk of using 
the transportation services to increase referrals. First, the safe 
harbor would not protect free or discounted local transportation that 
an Eligible Entity makes available only to patients who were referred 
to it by particular health care providers or suppliers. Likewise, the 
safe harbor would not protect an offer of transportation that is 
contingent

[[Page 59723]]

on a patient's seeing particular providers or suppliers who may be 
referral sources for the Eligible Entity offering the transportation. 
These restrictions would not prohibit Eligible Entities from setting 
limitations on the furnishing of free or discounted local 
transportation, but they would require that the limitations be 
unrelated to the volume or value of referrals. For example, a hospital 
could place a limit of 10 miles or a limit on the number of trips on 
its offer to transport a patient to another health care provider or 
supplier for the purpose of obtaining items or services necessary to 
avoid hospital readmissions. It could not, however, limit the offer of 
transportation to patients who receive these items or services from the 
hospital's referral sources. We are considering and seek comments on 
any additional safeguards that would be required to limit the risk of 
fraud and abuse associated with one health care provider or supplier 
providing transportation to the premises of another, as well as on 
whether one provider or supplier of services should be permitted to 
provide free or discounted local transportation to the premises of 
others at all. For example, if the safe harbor is to cover 
transportation provided by one health care provider to the premises of 
another, should it be required that the patient be an established 
patient of the provider or supplier to which the patient would be 
transported, as well as an established patient of the Eligible Entity 
offering the transportation? We also recognize that health systems, 
health plans, accountable care organizations, or other integrated 
networks of providers and suppliers might be Eligible Entities and 
might seek to establish a free or discounted local transportation 
program only among providers and suppliers within the system or 
network. We seek comments on the impact on those potential programs if 
we include, as conditions of safe harbor protection, the restrictions 
on offers of transportation set forth in this section. We are 
considering whether, and if so, how, the safe harbor conditions should 
be modified to account for differences that may exist when these kinds 
of entities provide free or discounted local transportation. We are 
also considering whether, for these kinds of entities, safe harbor 
protection should apply only to free or discounted local transportation 
provided to destinations that are participating or network providers or 
suppliers; conversely, we are considering whether such entities should 
be permitted or required to provide free or discounted local 
transportation to non-network or non-participating providers or 
suppliers and, if so, under what conditions. Finally, if we were to 
have different standards applicable to entities that do not directly 
furnish health care services, we are interested in comments suggesting 
safeguards to prevent abuses such as overutilization, improper patient 
steering, and increased costs.
    (d) We also propose to require that the offer or granting of free 
or discounted local transportation services not be based on the type of 
treatment a patient might receive. Under the proposed safe harbor, an 
Eligible Entity would be permitted to restrict offers of free or 
discounted local transportation to patients whose conditions require 
frequent or critical (e.g., follow-up testing for a drug that has the 
potential for serious side effects) appointments, but who do not have 
reliable transportation. In practice, this means that a free or 
discounted local transportation offer might be restricted to patients 
with chronic conditions, or even, in some circumstances, to patients 
with a specific illness. However, limiting offers of transportation to 
patients who have been prescribed expensive treatments that are 
lucrative for the Eligible Entity offering the transportation (or a 
referral source, parent company, subsidiary, or other affiliated entity 
of the Eligible Entity) would not be protected. For example, an 
oncology group that offered an expensive radiation treatment in its 
office could not restrict its offers of transportation to patients who 
require the lucrative radiation treatments. The group could, however, 
offer transportation to patients who require frequent appointments to 
monitor their condition, even if some of those patients also would 
receive the radiation treatment. We solicit comments on this proposal.
    (e) In addition, we are considering and seek comments on whether to 
require Eligible Entities to maintain documented beneficiary 
eligibility criteria, such as a requirement that the patient show 
transportation need or financial need or that the transportation 
assistance would address risks associated with failure to comply with a 
treatment regimen. Offering transportation to patients solely on the 
basis of number of appointments, without regard to transportation need, 
raises the possibility that the offer might be based upon the volume of 
Federal health care program business and thus would not be protected.
    (f) Finally, we are considering and solicit comments on whether 
Eligible Entities should be limited for purposes of safe harbor 
protection to providing transportation for medical purposes or if 
Eligible Entities should also be protected under the safe harbor if 
they provide free or discounted local transportation for other purposes 
that relate to the patient's health care (e.g., to apply for government 
benefits, to obtain counseling or other social services, or to get to 
food banks or food stores). We would not protect transportation for 
purposes wholly unrelated to health care, such as transportation to 
entertainment or sporting events. We note, however, that the anti-
kickback statute prohibits offering or providing remuneration to induce 
referrals for or receiving items or services paid for by Federal health 
care programs. The provision of transportation for non-medical 
purposes, even by a provider or supplier of health care services, would 
not necessarily violate the statute, depending on the facts and 
circumstances. For example, a hospital could potentially sponsor 
shuttle service between a housing complex and a grocery store without 
running afoul of the statute, if the service were available to all 
residents of the complex regardless of whether they were or would 
become patients of the hospital.
    We are considering and solicit comments on whether the safe harbor 
should separately protect transportation supplied by an Eligible 
Entity, such as a hospital, in the form of bus or van service on 
regular routes that include neighborhoods served by the hospital, 
public transportation stops, and the hospital campus or other locations 
where referring physicians have offices. If we were to protect this 
type of transportation, protection would not necessarily be limited to 
established patients of an Eligible Entity. We recognize that certain 
communities may have a need for this type of service, but we also 
recognize that such a service presents opportunities for fraud and 
abuse. Thus, we solicit comments not simply on whether this type of 
service would be useful but also on what additional safeguards we could 
include to reduce the risk that Eligible Entities would use this 
service to bring in patients for unnecessary services, leading to 
overutilization or compromised quality of care.
    (2) We propose to limit the form of transportation by excluding 
from safe harbor protection air, luxury (e.g., limousine), and 
ambulance-level transportation.
    (3) We propose and solicit comments on the following limitations, 
which would be designed to exclude from

[[Page 59724]]

protection transportation that is, in reality, a means for providers 
and suppliers to pay for recruitment of patients. First, we propose to 
exclude from safe harbor protection transportation services that are 
publicly advertised or marketed to patients or others who are potential 
referral sources. Second, we propose that the safe harbor would not 
apply if Eligible Entities were to pay drivers or others involved in 
arranging the transportation on a per-beneficiary transported basis, 
rather than, for example, on an hourly or mileage basis. Third, no safe 
harbor protection would be available if marketing of health care items 
and services occurred during the course of the transportation. For 
purposes of this safe harbor condition, we would not consider signage 
on the vehicle designating the source of the transportation (e.g., the 
name of the hospital) to be ``marketing.''
    (4) We propose to protect only local transportation services 
provided: (a) To the patient and, if needed, a family member or other 
person to assist the patient, to obtain medically necessary items or 
services and (b) within the local area of the health care provider or 
supplier to which the patient would be transported. We propose 
permitting the free or discounted local transportation to be extended 
to a family member, a friend, or other person involved in the patient's 
care. We recognize that it may be beneficial or necessary in some 
circumstances for the patient to be accompanied by another person, and 
we do not view this extension as increasing the risk of fraud and 
abuse. We do not intend to require that the need for a patient 
companion be documented, nor do we intend that transportation of a 
patient companion be required for the proposed safe harbor to apply to 
transportation of the patient.
    Finally, we propose to limit the safe harbor to local 
transportation. In the interest of providing clear guidance, we propose 
that if the distance that the patient would be transported is no more 
than 25 miles, then the transportation would be deemed to be local. We 
solicit comments on whether 25 miles is an appropriate distance for 
this deeming provision. We also solicit comments on whether 25 miles 
should be a fixed limitation rather than a distance ``deemed'' to 
comply with the safe harbor.\9\
---------------------------------------------------------------------------

    \9\ If 25 miles is a fixed limitation, nothing beyond that 
distance would be ``local'' under the safe harbor, unless the final 
rule includes alternate tests. If 25 miles is deemed to be local, an 
Eligible Entity could still comply with the ``local'' requirement 
beyond 25 miles under appropriate facts and circumstances.
---------------------------------------------------------------------------

    We recognize that a distance-based test is not a one-size-fits-all 
solution. Therefore, we are considering and seek comments on other 
reasonable methods for interpreting the term ``local'' either alone or 
in combination with the 25-mile deeming provision. For example, we are 
considering and solicit comments on:
     Whether to allow a more expansive service area for 
patients who reside in rural or underserved areas, and if so, what the 
appropriate test should be and if ``rural'' or ``underserved'' should 
be defined;
    [cir] If we were to include definitions, we solicit comments on: 
(1) Defining ``underserved'' as being located either in a Health 
Professional Shortage Area or a Medically Underserved Area; and (2) 
using the definition of ``rural'' accepted by the Office of Rural 
Health Policy (i.e., all counties outside a Metropolitan Statistical 
Area (MSA), plus counties within MSAs with Rural-Urban Commuting Codes 
4-10). We also solicit comments on alternate definitions for these 
terms;
    [cir] If we were to deem a greater distance to be ``local'' in 
rural or underserved areas, we solicit comments on expanding the 
distance to 35 miles or to the nearest facility capable of providing 
medically necessary items and services, whichever is greater;
     whether to permit free or discounted local transportation 
to the nearest facility capable of providing medically necessary items 
and services, even if the beneficiary resides farther away than the 
proposed mileage limits would otherwise allow;
     whether travel time might be more appropriate than a 
distance-based method;
     whether the general approach used in the regulations 
governing exceptions to the self-referral prohibition related to 
compensation arrangements regarding ``geographic area served by the 
hospital,'' which uses a calculation based on the contiguous ZIP Codes 
from which hospitals draw at least 75 percent of their inpatients (see 
42 CFR 411.357(e)(2)), would be useful; and
     whether a more general approach, such as transportation 
offered to patients within the primary service area of the provider or 
supplier (or other location) to which the patient would be transported, 
would be appropriate.

We solicit comments on all of these possible approaches, and we will 
consider alternative suggestions as well.
    (5) We propose requiring the Eligible Entity that makes the 
transportation available to bear the costs of the free or discounted 
local transportation services and not shift the burden of these costs 
onto Medicare, a State health care program, other payers, or 
individuals. Moreover, safe harbor protection would not be available if 
the Eligible Entity providing the transportation and the destination 
provider or supplier had any referral agreement tied to the 
transportation. For example, if an ambulance supplier had an agreement 
with a hospital to provide certain free transports to hospital 
outpatients (e.g., via van service) in exchange for receiving the 
hospital's transports that are payable by Medicare Part B, the free 
transportation would not be protected.

B. Civil Monetary Penalty Authorities

    This proposed rule would amend 42 CFR Part 1003 in two ways. First, 
we propose to amend the definition of ``remuneration'' related to the 
beneficiary inducements CMP to: (a) Add a self-implementing exception 
that was enacted in BBA of 1997 but was never codified in our 
regulations; and (b) codify amendments that were enacted in ACA. 
Second, we propose to codify in our regulations the Gainsharing CMP by 
interpreting terms used in that statute and adding a definition of 
``hospital'' to the regulations.
1. Beneficiary Inducements CMP
    This proposed rule would add exceptions to the regulations at Part 
1003 addressing the civil monetary penalties prohibition against 
offering inducements to Medicare or Medicaid beneficiaries that the 
offeror knows or should know are likely to influence the selection of 
particular providers, practitioners or suppliers.\10\ As we explained 
in footnote 2 above, one exception to the definition of 
``remuneration'' for purposes of the beneficiary inducements CMP 
incorporates exceptions to the anti-kickback statute and the safe 
harbor regulations. However, no parallel exception exists in the anti-
kickback statute. Thus, the exceptions in section 1128A(i)(6) of the 
Act apply only to the definition of ``remuneration'' applicable to 
section 1128A.
---------------------------------------------------------------------------

    \10\ For additional background on this provision, see 65 FR 
24400 (Apr. 26, 2000).
---------------------------------------------------------------------------

    Section 4523 of the BBA of 1997 added section 1833(t)(5)(B) of the 
Act, which required the Secretary to establish a procedure to permit 
hospitals to elect to reduce copayment amounts for some or all covered 
hospital outpatient department (OPD) services (as defined in section 
1833(t)(1)(B)) to no less than 20 percent of the Medicare OPD fee 
schedule

[[Page 59725]]

amount. The Secretary established the required procedures at 42 CFR 
419.42.
    Section 4523 of the BBA of 1997 also added subsection (D) to the 
definition of ``remuneration'' at section 1128A(i)(6) of the Act. That 
subsection, which was subsequently redesignated subsection (E), 
excluded from the definition of ``remuneration'' ``a reduction in the 
copayment amount for covered OPD services under section 1833(t)(5)(B) 
[of the Act].'' Id. Subsequent to the BBA of 1997, sections 201(a) and 
202(a) of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement 
Act of 1999 (106 Pub. L. 113) redesignated subsection 1833(t)(5) as 
section 1833(t)(8). A corresponding change to the reference at 
1128A(i)(6)(E) was not made. We propose to codify the exception to the 
definition of ``remuneration'' at 1128A(i)(6)(E) in our regulations at 
proposed 42 CFR 1003.110 (current Sec.  1003.101). We propose to adopt 
language identical to the statutory language, except that we propose to 
change the reference from 1883(t)(5)(B) to 1883(t)(8)(B) to reflect the 
redesignation of the originally referenced subsection. We believe that 
our proposed change is consistent with congressional intent and merely 
addresses an inadvertent oversight. We solicit comments on this 
proposal.
    Section 6402(d)(2)(B) of ACA amends the statutory definition of 
``remuneration'' at section 1128A(i)(6) of the Act by adding four new 
subparagraphs, (F)-(I), protecting certain charitable and other 
programs. We propose to amend the definition of ``remuneration'' in the 
regulations to include the new statutory exceptions. We believe these 
exceptions are intended to protect certain arrangements that offer 
beneficiaries incentives to engage in their wellness or treatment 
regimens or that improve or increase beneficiary access to care, 
including better care coordination. However, in structuring the 
proposals, we are also mindful of the significant potential for abusive 
arrangements that offer vulnerable beneficiaries (or, in some cases, 
cooperating beneficiaries) remuneration, whether in cash or in kind, to 
induce them to obtain items or services billable to Medicare or 
Medicaid that may be unnecessary, too expensive, or of poor quality. 
The proposals set forth below aim to ensure that additional protections 
offered for arrangements that benefit patient care do not lead to such 
abuses.
Promotes Access/Low Risk of Harm
    The first new exception to the definition of ``remuneration,'' 
added at section 1128A(i)(6)(F) of the Act, protects ``any other 
remuneration which promotes access to care and poses a low risk of harm 
to patients and Federal health care programs (as defined in section 
1128B(f) and designated by the Secretary under regulations).''
    For purposes of this exception, we propose that the phrase 
``promotes access to care'' mean that the remuneration provided 
improves a particular beneficiary's ability to obtain medically 
necessary health care items and services. We solicit comments on 
whether this phrase should be interpreted more broadly, particularly in 
light of the movement towards coordinated or integrated care 
arrangements that depend, in part, on patient engagement. For example, 
we are considering whether to interpret ``promotes access to care'' to 
include encouraging patients to access care, supporting or helping 
patients to access care, or making access to care more convenient for 
patients than it would otherwise be. We request that any such comments 
include specific examples of remuneration that would promote access to 
care under a broader definition that would not be included within the 
proposed interpretation above. When providing examples, we request that 
commenters bear in mind that not all forms of remuneration provided to 
beneficiaries would be prohibited by the beneficiary inducements CMP. 
The beneficiary inducements CMP applies only to remuneration that the 
donor ``knows or should know is likely to influence [the recipient] to 
order or receive from a particular provider, practitioner, or supplier 
any item or service for which payment may be made'' by Medicare or 
Medicaid. Thus, remuneration that is not likely to influence a 
beneficiary to order or receive federally reimbursable items or 
services from a particular provider, practitioner, or supplier need not 
meet the conditions of this or any other exception.
    We are also considering, and soliciting comments on, whether the 
test for the exception should be that the remuneration would promote 
access to care for a particular beneficiary or whether the exception 
should also apply to remuneration that promotes access to care for a 
defined beneficiary population generally, such as, by way of example, 
beneficiaries in a designated care network or beneficiaries being 
treated under a designated care protocol. Finally, we are considering, 
and soliciting comment on, whether we should more broadly interpret 
``access to care'' to include care that is non-clinical but reasonably 
related to the patient's medical care, such as social services.
    We propose to interpret the phrase ``low risk of harm to Medicare 
and Medicaid beneficiaries and the Medicare and Medicaid programs'' as 
meaning that the remuneration: (1) Is unlikely to interfere with, or 
skew, clinical decision-making; (2) is unlikely to increase costs to 
Federal health care programs or beneficiaries through overutilization 
or inappropriate utilization; and (3) does not raise patient-safety or 
quality-of-care concerns.
    While some forms of remuneration covered by the prohibition at 
section 1128A(a)(5) of the Act may promote access to care and some 
forms may pose a low risk of harm to Medicare and Medicaid 
beneficiaries and the programs, the amendment to the statute applies 
only to forms of otherwise prohibited remuneration that meet both of 
these standards. By way of example, through our advisory opinion 
process, we have examined and approved arrangements that meet both 
requirements. In these arrangements, certain hospitals provide lodging 
assistance to patients and their families when the assistance was 
necessary for the patient to obtain appropriate care. Because of the 
specialized nature of these hospitals, the lodging programs were 
unlikely to steer patients to those particular hospitals, and the costs 
were not passed on to Federal programs. Yet, the programs enabled 
patients to get treatment that they might not otherwise have been able 
to access because of logistical hurdles. See OIG Advisory Opinion Nos. 
11-01 and 11-16. Similarly, we believe that giving items that are 
necessary for patients to record and report health data, such as blood 
pressure cuffs or scales, to beneficiaries who could benefit from close 
monitoring of their blood pressure or weight, promotes access to care, 
because the recording and reporting of health data increase their 
ability to obtain medically necessary care and pose a low risk of harm 
to patients and Federal programs as long as receipt of the items is not 
conditioned on the patient obtaining other items or services from a 
particular provider or supplier.
    However, not every program that benefits patients would meet the 
terms of this exception. We continue to believe that offering valuable 
gifts to beneficiaries in connection with direct or indirect marketing 
activities is not low risk to beneficiaries or to the Medicare and 
Medicaid programs. In addition, we are concerned that rewards offered 
by providers or suppliers to patients purportedly for compliance

[[Page 59726]]

with a treatment regimen pose a risk of abuse, in cases when the 
offerors know or should know that the rewards are likely to influence 
the recipients to order or receive from a particular source items or 
services paid for by Medicare or Medicaid. For example, patients might 
seek or agree to seek unnecessary or poor quality care to obtain the 
rewards, or providers and suppliers might order or seek orders for 
additional items or services to recoup the costs of giving the rewards. 
In either case, such rewards would not be low risk for patients and/or 
Federal health care programs.
    While we are concerned about the significant potential for abuse 
when patients are offered rewards to induce them to receive items or 
services, we are also aware that, in some circumstances, patients might 
be offered incentives to encourage them to engage in arrangements that 
lower health care costs (without compromising quality) or that promote 
their own wellness and health care, for example, by participating fully 
in appropriate prescribed treatment, achieving appropriate treatment 
milestones, or following up with medically necessary appointments. We 
seek comments on whether otherwise prohibited incentives for compliance 
with treatment regimens should be permitted under this exception and if 
so, what limitations or safeguards should be required. For example, 
should the incentives be subject to specific dollar value limits? 
Should providers or suppliers offering the incentives be required to 
document the milestones reached to earn the incentives? Should the form 
of the incentive be required to bear a reasonable connection to the 
medical care? Are there quality or performance metrics or monitoring 
mechanisms that, if required for safe harbor compliance, would help 
ensure that protected patient incentives are not used to facilitate 
abusive arrangements that increase costs or compromise quality? Are 
there different considerations if the offeror of the incentive is at 
risk, in whole or in part (or directly or indirectly) for the treatment 
that the incentive is intended to encourage (e.g., if the offeror is a 
risk-bearing accountable care organization, medical home, or health 
plan; a hospital subject to readmissions penalties; or a provider 
reimbursed under a bundled payment arrangement that includes some or 
all of the incentivized treatment)?
    We recognize that the Department is undertaking a number of 
initiatives and demonstration programs with the goal of encouraging 
better care and better health at lower costs through innovative means, 
some of which could involve providing incentives to beneficiaries. 
These programs include, for example, a variety of permanent and 
demonstration programs testing accountable care organizations, medical 
homes, bundled payments, coordinated care programs, and other 
initiatives to improve the quality of care and reduce costs. Some 
participants in particular CMS models, such as the Bundled Payment for 
Care Initiative, may have waivers of the CMP for certain arrangements 
undertaken as part of the applicable CMS model.\11\ With respect to CMS 
programs or models to which a waiver does not apply, we are considering 
whether to make a special provision in this rule for incentives offered 
by participants to beneficiaries covered by those programs. Many of 
these programs have safeguards built into their structures. For 
example, CMS reviews and monitors these programs, beginning with an 
application process, continuing through the development and 
implementation phases, and including a final assessment of the overall 
impact of the program on cost and quality of care. Because incentives 
offered to beneficiaries to foster patient engagement outside the 
auspices of such a CMS program are not subject to this oversight, we 
would not necessarily consider that remuneration (if otherwise 
prohibited by the beneficiary inducements CMP) to be low risk, unless 
it met the same safeguards that we finalize in connection with this 
proposed rule.
---------------------------------------------------------------------------

    \11\ Nothing in this proposed rule would change the application 
of existing waivers. It is possible that a final exception, as 
proposed here, might offer additional protection for participants in 
programs that have such a waiver.
---------------------------------------------------------------------------

    We are also soliciting comments on other types of remuneration to 
beneficiaries not mentioned in this preamble that both promote access 
to care and pose a low risk of harm to Medicare and Medicaid 
beneficiaries and the Medicare and Medicaid programs, to inform our 
development of regulatory text for this exception. We are not providing 
regulatory text at this time, but we solicit proposals for language, 
including specific examples of the types of remuneration to 
beneficiaries, that would implement the principles described above.
Retailer Rewards Programs
    Section 6402(d)(2)(B) of ACA adds the following exception as new 
section 1128A(i)(6)(G) of the Act:

    The offer or transfer of items or services for free or less than 
fair market value by a person, if--
    (i) the items or services consist of coupons, rebates, or other 
rewards from a retailer;
    (ii) the items or services are offered or transferred on equal 
terms available to the general public, regardless of health 
insurance status; and
    (iii) the offer or transfer of the items or services is not tied 
to the provision of other items or services reimbursed in whole or 
in part by the program under title XVIII or a State health care 
program (as defined in section 1128(h)).

    This exception concerns retailer rewards programs. We are aware 
that this genre of program has proliferated in recent years at grocery 
stores, drug stores, ``big-box,'' and other retailers. Although these 
retailer rewards programs vary in design, in general most attempt to 
incentivize and reward customer loyalty by providing benefits to 
shoppers. Many retailers offering such programs have pharmacies that 
sell items or services reimbursable by Federal health care programs.
    OIG has interpreted the prohibition on offering gifts and other 
inducements to beneficiaries as permitting Medicare or Medicaid 
providers generally to offer beneficiaries inexpensive gifts or 
services (other than cash or cash equivalents) without violating the 
statute. For enforcement purposes, we have considered inexpensive gifts 
or services to be those that have a retail value of no more than $10 
individually and no more than $50 in the aggregate annually per 
patient.\12\ Notwithstanding this interpretation, we understand that 
many retailer reward programs have included a blanket exclusion of 
Federal health care program beneficiaries. Against this backdrop, we 
believe this new exception should increase retailers' willingness to 
include Federal health care program beneficiaries in their reward 
programs in appropriate circumstances.
---------------------------------------------------------------------------

    \12\ See Special Advisory Bulletin: Offering Gifts and Other 
Inducements to Beneficiaries, available at http://oig.hhs.gov/fraud/docs/alertsandbulletins/SABGiftsandInducements.pdf.
---------------------------------------------------------------------------

    Section 6402(d)(2)(B) of ACA excludes from the definition of 
``remuneration'' rewards pursuant to a retailer rewards program that 
meet three criteria. The first criterion provides that the free or 
less-than-fair-market-value items or services must ``consist of 
coupons, rebates, or other rewards from a retailer.'' We propose to 
interpret these terms as follows. We interpret a ``coupon'' as 
something authorizing a discount on merchandise or services. For 
instance, if Alpha Store's rewards program mails its customers a flyer 
offering 20 percent off the purchase price of any item in the store, 
the flyer would be considered a coupon. Another example of a coupon 
would be a ``buy one get one free'' reward. We propose to

[[Page 59727]]

interpret ``rebate'' as a return on part of a payment. For example, if 
Beta Store's retailer reward program consisted of returning to 
customers a store credit equal to 1 percent of the total money the 
customer spent out-of-pocket at the retailer during the previous 
calendar year, it would constitute a rebate. In no event, however, 
could a retailer ``rebate'' an amount that exceeds what the customer 
spent at the store. We propose to interpret ``other rewards'' primarily 
as describing free items or services, such as store merchandise, 
gasoline, frequent flyer miles, etc. Finally, we interpret ``retailer'' 
as having its usual meaning, i.e., an entity that sells items directly 
to consumers. We note, however, that individuals or entities that 
primarily provide services (e.g., hospitals or physicians) would not be 
considered ``retailers.'' We are considering and solicit comments on 
whether entities that primarily sell items that require a prescription 
(e.g., medical equipment stores) should be considered ``retailers.''
    The second criterion requires that the items or services be offered 
or transferred on equal terms to the public, regardless of health 
insurance status. We propose to interpret this requirement consistent 
with OIG's longstanding concern that providers and suppliers of items 
or services reimbursable in whole or in part by Federal health care 
programs not discriminate against (``lemon drop'')--or, conversely, 
``cherry pick''--certain patients on the basis of health insurance 
status. For example, we do not believe that a retailer that targets its 
rewards program to Medicare beneficiaries only would meet this 
criterion. On the other hand, if a retailer mailed a coupon for $10 off 
the next purchase of any item in its store, including prescriptions, to 
every resident in the surrounding ZIP Code, such a promotion likely 
would be in compliance with this provision because the coupon would be 
offered on equal terms to everyone in the ZIP Code, without regard to 
health insurance status.
    The third criterion requires that the offer or transfer of the 
items or services not be tied to the provision of other items or 
services reimbursed in whole or in part by Medicare or an applicable 
State health care program. We believe that the objective of this 
criterion is to attenuate any connection between federally payable 
items and services and a loyalty program's rewards; this attenuation 
should be present both in the manner in which a reward is earned and in 
the manner in which the reward is redeemed, as explained further below. 
We do not interpret the prohibition on tying the free or below-market 
items and services to federally reimbursable services as requiring a 
complete severance of the offer from the medical care of the 
individual. At the front end of a transaction (``earning'' the reward), 
the reward should not be conditioned on the purchase of goods or 
services reimbursed in whole or in part by a Federal health care 
program and should not treat federally reimbursable items and services 
in a manner that is different from that in which non-reimbursable items 
and services are treated. For instance, a drugstore program that 
offered a $20 coupon to customers, including Medicare beneficiaries, 
who transferred their prescriptions to the drugstore would not meet 
this criterion because the $20 coupon would be tied to the drugstore's 
getting the recipients' Medicare Part D prescription drug business. On 
the other hand, a program that awarded a $20 coupon once a customer 
spent $1,000 out-of-pocket in the store--even if a portion of that 
$1,000 included copayments for prescription drugs--would likely meet 
the criterion. We also believe that this attenuation must be present on 
the ``redeeming'' end of the transaction and therefore interpret it to 
exclude from protection rewards programs in which the rewards 
themselves are items or services reimbursed in whole or in part by a 
Federal health care program. Thus, if Epsilon Store allowed its 
customers to redeem reward points only for cost-sharing (i.e., the 
customer's out-of-pocket costs) on DME, prescription drugs, or other 
federally payable items or services, that program would not meet this 
criterion. On the other hand, if the $10 coupon referenced in the first 
example could be redeemed on anything purchased in the store, including 
the customer's out-of-pocket costs for federally reimbursable items, 
the coupon could meet the terms of the exception.
Financial-Need-Based Exception
    A third new statutory provision, added at 1128A(i)(6)(H) of the 
Act, excepts from the definition of ``remuneration'' the offer or 
transfer of items or services for free or at less than fair market 
value after a determination that the recipient is in financial need and 
meets certain other criteria.
    We begin our consideration of this new provision by noting that it 
concerns ``the offer or transfer of items or services.'' The term 
``items or services'' does not include cash or instruments convertible 
to cash. This interpretation is consistent with our interpretation of 
``permissible incentives for preventive care'' under section 
1128A(i)(6)(D), as explained in the preamble to that final rule (``we 
are excluding from the scope of permissible exceptions cash and 
instruments convertible to cash'' (65 FR 24400, 24409 (Apr. 26, 2000)). 
Other proposed limits on what may be transferred are discussed in the 
paragraphs below.
    The statute provides that protected items or services may not be 
offered as part of any advertisement or solicitation. We are including 
this requirement in our proposed regulation.
    The second statutory criterion is that ``the items or services are 
not tied to the provision of other services reimbursed in whole or in 
part by the program under title XVIII or a State health care program. . 
. .'' To interpret this criterion in a meaningful way, it is necessary 
to consider it together with the next requirement, which is that there 
must be a reasonable connection between the items or services and the 
medical care of the individual. Each requirement is discussed in more 
detail below.
    To be protected under the statute, the item or service being 
offered or transferred must not be tied to the provision of other 
reimbursed services. Consistent with our interpretation of the same 
criterion described in connection with the exception for retailer 
rewards programs described above, we do not interpret the prohibition 
on tying the free or below-market items and services to services 
reimbursable by Medicare or Medicaid as requiring a complete severance 
of the offer from the medical care of the individual. However, a 
provider's conditioning the offer or transfer of items or services on 
the patient's use of other services from the provider that would be 
reimbursed by Medicare or Medicaid would violate this requirement. For 
example, we interpret this criterion to exclude from protection offers 
by providers of lodging or transportation to receive a particular 
service from the provider.\13\ We solicit comments on this 
interpretation.
---------------------------------------------------------------------------

    \13\ As explained above, we have approved lodging and 
transportation assistance programs through our advisory opinion 
process. However, we found that the programs were consistent with 
the exception to the definition of ``remuneration'' for programs 
that promote access to care and pose a low risk of harm to patients 
and Federal health care program beneficiaries.
---------------------------------------------------------------------------

    The third statutory requirement is that there ``is a reasonable 
connection between the items or services and the medical care of the 
individual.'' We must interpret this requirement in the context of this 
particular exception. This exception is designed to help financially 
needy individuals access items or services related to their medical

[[Page 59728]]

care; unlike the preventive care exception referenced above, this 
exception is not designed to induce the patient to seek additional 
care.
    For purposes of this requirement, we interpret ``medical care'' to 
refer to the treatment and management of illness or injury and the 
preservation of health through services offered by the medical, dental, 
pharmacy, nursing, and allied health professions. Consistent with the 
statutory language, our proposed regulation would require a 
``reasonable connection'' between the remuneration and the patient's 
medical care. Whether a ``reasonable connection'' exists depends on a 
situation's specific facts and circumstances. In particular, this 
requirement warrants a dual consideration: Whether a reasonable 
connection exists from a medical perspective and whether a reasonable 
connection exists from a financial perspective. A reasonable connection 
exists from a medical perspective when the items or services would 
benefit or advance identifiable medical care or treatment that the 
individual patient is receiving. From a financial perspective, 
remuneration disproportionately large compared with the medical 
benefits conferred on the individual patient would not have a 
reasonable connection to the patient's medical care. Such remuneration 
gives rise to an inference that at least part of the transfer is being 
provided to induce beneficiaries to obtain additional services, and 
such remuneration would not be covered by the Financial-Need-Based 
Exception.
    Examples of transfers of items or services that, in context, might 
qualify as reasonably connected to medical care include:
     Distribution of protective helmets and safety gear to 
hemophiliac children;
     distribution of pagers to alert patients with chronic 
medical conditions to take their drugs;
     provision of free blood pressure checks to hypertensive 
patients;
     distribution of free nutritional supplements to 
malnourished patients with end-stage renal disease (ESRD); and
     provision of air conditioners to asthmatic patients.
    However, in another context, these same items and services would 
not likely qualify as reasonably connected to an individual patient's 
medical care. Most obviously, these would include transfers of items or 
services to an individual for whom they were not medically indicated. 
We are considering and seek comments, however, on the boundaries of the 
concept of ``medically indicated.'' For example, should a hospital be 
permitted to provide free bicycle helmets or other child safety devices 
to financially needy families when children are treated for injuries in 
the emergency department? We use this example, which arguably is not 
related to ``care,'' in order to inform comments on the limits of the 
``reasonable connection to care'' requirement.
    From a financial perspective, transfers of items or services of 
disproportionately large value compared with their medical benefit for 
the individual patient would not qualify. For example, transfer to a 
diabetic patient of a smartphone preloaded with an ``app'' relating to 
management of blood sugar levels would not likely qualify, while an 
offer to the diabetic patient of only a complimentary download of the 
app onto his or her own smartphone might.
    We are considering whether we can (and, if so, whether we should) 
identify specific conditions under which remuneration would be deemed 
to be ``reasonably connected'' to the patient's medical care, and we 
solicit suggestions for possible conditions. For example, one condition 
we are considering is whether the patient's physician or other health 
care professional has concluded that the items or services would 
benefit the individual patient's treatment. Another possible condition 
is whether, absent the transfer of needed health care items or 
services, the patient would otherwise be expected to lack access to 
them for reasons including lack of payment resources; lack of 
appropriate health care facilities in the patient's community or the 
surrounding areas; and unique physical, behavioral, or mental health 
issues that might interfere with the patient's ability to otherwise 
obtain access. Such circumstances in a patient's case would support the 
argument for a reasonable connection. We solicit comments about what 
additional or alternative factors should be considered, if any, in the 
determination of a reasonable connection between items or services 
offered or transferred and the medical care of the individual.
    The fourth and final statutory requirement is that the items or 
services may be provided only ``after determining in good faith that 
the individual is in financial need.'' We propose to interpret this 
provision as requiring an individualized assessment of the patient's 
financial need on a case-by-case basis. Moreover, the assessment must 
be conducted in good faith. We believe, among other things, that a good 
faith assessment requires the use of a reasonable set of income 
guidelines, uniformly applied. This reasonable set of financial need 
guidelines should be based on objective criteria and be appropriate for 
the applicable locality. Under our proposal, ``financial need'' would 
not be limited to ``indigence,'' but could include any reasonable 
measure of financial hardship. What constitutes a good faith 
determination of ``financial need'' may vary depending on the 
individual patient's circumstances; the individual or entity offering 
the items or services should have flexibility to consider relevant 
variables. We are considering whether we have authority to require 
documentation of the financial need assessment as a condition of the 
exception. Regardless, it would be prudent for those seeking protection 
under the proposed exception to maintain accurate and contemporaneous 
documentation of the need assessment and the criteria applied.
Waivers of Cost-Sharing for the First Fill of a Generic Drug
    The fourth new provision added at section 1128A(i)(6)(I) of the Act 
excepts from the definition of ``remuneration'' waivers by a PDP 
sponsor of a Part D plan or MA organization offering MA-PD plans of any 
copayment that would be otherwise owed by their enrollees for the first 
fill of a covered Part D drug that is a generic drug. Section 
6402(d)(2)(B) of ACA does not define the term ``generic drug,'' so we 
propose to rely on the definition in the Part D regulations at 42 CFR 
423.4.
    The type of waiver described in the statute is designed to minimize 
drug costs by encouraging the use of lower cost generic drugs. To 
implement this waiver, we propose interpreting this statutory provision 
consistently with current CMS guidance. Thus, sponsors desiring to 
offer these waivers to their enrollees would be required to disclose 
this incentive program in their benefit plan package submissions to 
CMS. We propose to include this requirement both to ensure consistency 
with current CMS practice and to ensure transparency to beneficiaries 
when they select Part D or MA plans. We propose to make this exception 
effective for coverage years beginning after publication of the final 
rule. We note, however, that CMS already permits these waivers as part 
of Part D and MA plan benefit designs. Although this proposed 
regulation will not be effective until a future date, we will not 
exercise our enforcement authority against plans complying with CMS 
requirements for these waivers in the interim.
2. Gainsharing
    The Gainsharing CMP is a self-implementing law that prohibits

[[Page 59729]]

hospitals and critical access hospitals from knowingly paying a 
physician to induce the physician to reduce or limit services provided 
to Medicare or Medicaid beneficiaries who are under the physician's 
direct care. We proposed regulations in 1994 to interpret the 
Gainsharing CMP (59 FR 61571 (Dec. 1, 1994)), but the proposed rule was 
not finalized. In July 1999, we published a Special Advisory Bulletin 
titled ``Gainsharing Arrangements and CMPs for Hospital Payments to 
Physicians to Reduce or Limit Services to Beneficiaries'' (the 
Gainsharing SAB), available at: https://oig.hhs.gov/fraud/docs/alertsandbulletins/gainsh.htm. In the Gainsharing SAB, we explained 
that the Gainsharing CMP is broad and prohibits any hospital incentive 
plan that involves payments to physicians to encourage reductions or 
limitations in items or services provided to patients under the 
physicians' clinical care. We observed that the statute does not limit 
this prohibition to reductions or limitations of medically necessary 
items or services.
    We have previously observed that not all changes in practice 
necessarily constitute a reduction of services. Health care payment and 
delivery systems are changing, with greater emphasis on accountability 
for providing high quality care at lower costs. We propose to codify 
the Gainsharing CMP in our regulations and interpret certain provisions 
in a manner that reflects today's health care landscape.
    OIG has recognized that gainsharing can be beneficial. In fact, we 
have approved 16 gainsharing arrangements through our advisory opinion 
process.\14\ We found that the particular facts presented to us in 
those arrangements presented few risks relative to those of other 
gainsharing arrangements. The gainsharing programs in the advisory 
opinions set out specific actions to be taken and tied remuneration to 
the actual cost savings attributable to the arrangements. They included 
specific safeguards against patient and program abuse.
---------------------------------------------------------------------------

    \14\ OIG Advisory Opinion Nos.: 00-02, 01-01, 05-01, 05-02, 05-
03, 05-04, 05-05, 05-06, 06-22, 07-21, 07-22, 08-09, 08-15, 08-21, 
09-06, 12-22.
---------------------------------------------------------------------------

    Citing to many of these advisory opinions, the Medicare Payment 
Advisory Commission (MedPAC) recommended that Congress authorize the 
Secretary to allow gainsharing arrangements and to regulate those 
arrangements to protect the quality of care and minimize financial 
incentives that could influence physician referrals. See MedPAC, Report 
to the Congress: Physician-Owned Specialty Hospitals (March 2005) 
(MedPAC Report). The MedPAC Report provided examples of safeguards 
included in OIG advisory opinions and posited that gainsharing programs 
could lead to program savings over time. See id. at p. 46.
    Later that year, the Chief Counsel to the Inspector General 
testified to the House Committee on Ways and Means about gainsharing. 
The testimony highlighted three types of safeguards that the OIG looked 
for when evaluating the risks posed by a gainsharing program: Measures 
that promote accountability, adequate quality controls, and controls on 
payments that may change referral patterns. See Testimony of Lewis 
Morris, Chief Counsel to the Inspector General, House Committee on Ways 
and Means, Subcommittee on Health (October 7, 2005), available at 
https://oig.hhs.gov/testimony/docs/2005/Gainsharing10-07-05.pdf. 
Although the testimony focused largely on specific risks in gainsharing 
programs, and safeguards to counteract those risks, the testimony also 
explained that if properly structured, ``gainsharing arrangements may 
offer opportunities for hospitals to reduce costs without causing 
inappropriate reductions in medical services or rewarding referrals of 
Federal health care program patients.'' Id. at p. 1. In fact, OIG would 
be unlikely to bring a case against a hospital or physician for a 
gainsharing arrangement that included patient and program safeguards 
such as those identified in our advisory opinions.\15\
---------------------------------------------------------------------------

    \15\ OIG has never pursued any gainsharing CMP case. OIG always 
has been, and remains, open to pursuing a gainsharing CMP case under 
appropriate facts. Prior to initiating any such case, we would 
consider the factors set out in the advisory opinions and 
considerations discussed in this preamble. Pending further notice 
from OIG, gainsharing arrangements are not an enforcement priority 
for OIG unless the arrangement lacks sufficient patient and program 
safeguards.
---------------------------------------------------------------------------

    In addition, since 2005, Congress has authorized, and the Secretary 
has approved, a number of projects involving gainsharing. For example, 
the Deficit Reduction Act of 2005 \16\ required the Secretary to 
establish a gainsharing program to test and evaluate arrangements 
between hospitals and physicians designed to govern utilization of 
certain inpatient services to improve the quality and efficiency of 
care. Section 3022 of ACA required the Secretary to establish a 
Medicare shared savings program (Shared Savings program) and allowed 
the Secretary to waive such requirements of sections 1128A and 1128B 
and Title XVIII of the Act as may be necessary to carry out the 
provisions of section 3022. In the Interim Final Rule implementing the 
Shared Savings program waivers, the Secretary waived the Gainsharing 
CMP with respect to certain aspects of the Shared Savings program, 
subject to applicable conditions. See 76 FR 67992 (Nov. 2, 2011).
---------------------------------------------------------------------------

    \16\ Deficit Reduction Act of 2005, Public Law 109-171, Sec.  
5007, 120 Stat. 4, 34-36 (2006).
---------------------------------------------------------------------------

    Both government and private insurers have increased efforts to 
lower costs and improve the quality of care. Better ways of measuring 
quality and outcomes exist now than in the past. The growth of health 
information technology, developments in data analytics and quality 
metrics, and broader use of evidence-based medicine all facilitate such 
measurements and accountability for performance. For example, the 
Shared Savings program, as enacted, promotes an evidence-based medicine 
approach for accountable care organizations participating in the Shared 
Savings program (ACOs): ``[t]he ACO shall define processes to promote 
evidence-based medicine and patient engagement, report on quality and 
cost measures, and coordinate care, such as through the use of 
telehealth, remote patient monitoring, and other such enabling 
technologies.'' Section 1899(b)(2)(G) of the Act.
    Notwithstanding these and similar developments, the Gainsharing CMP 
has not been amended by Congress. It prohibits a hospital from 
knowingly making a payment, directly or indirectly, to a physician as 
an inducement to reduce or limit services provided to Medicare or 
Medicaid beneficiaries who are under the direct care of the physician. 
The statute does not prohibit only payments to reduce medically 
necessary services; it prohibits payments to reduce or limit 
``services.'' Without a change in the statute, we continue to believe 
that we cannot read a ``medically necessary'' element into the 
prohibition. However, given the changes in the practice of medicine 
over the years, including collaborative efforts among providers and 
practitioners and the rise of widely accepted clinical metrics, we are 
considering a narrower interpretation of the term ``reduce or limit 
services'' than we have previously held.
    Since issuing the Gainsharing SAB, we have had the opportunity to 
examine a number of different gainsharing arrangements through our 
advisory opinion process. In each favorable opinion we issued, we found 
that the cost-saving measures proposed by the hospitals implicated the 
statute. For example, in OIG Advisory Opinion No. 05-01, we stated: 
``the Proposed Arrangement constitutes an inducement to reduce or limit 
the current medical

[[Page 59730]]

practice at the Hospital.'' We went on to state that ``[w]e recognize 
that the current medical practice may involve care that exceeds the 
requirements of medical necessity. However, whether the current medical 
practice reflects necessity or prudence is irrelevant for purposes of 
the CMP.'' OIG Advisory Opinion No. 05-01 (issued Jan. 28, 2005, at pp. 
7-8).\17\ This language implies that any change to current medical 
practice that a hospital might initiate is potentially a reduction in 
care that could trigger CMP liability. However, as hospitals move 
towards using objective quality metrics, we recognize that a change in 
practice does not necessarily constitute a limitation or reduction of 
services, but may in fact constitute an improvement in patient care or 
a reduction in cost without reducing patient care or diminishing its 
quality.
---------------------------------------------------------------------------

    \17\ Under section 1862 of the Act, no payment may be made under 
Part A or Part B for any expenses incurred for items or services 
that (with certain exceptions) are not reasonable and necessary for 
the diagnosis or treatment of illness or injury or to improve the 
functioning of a malformed body member. Under the Part A prospective 
payment system (PPS) for hospital inpatient stays, payments are made 
for hospital stays that are reasonable and necessary; however, 
additional payment is not made if a patient receives individual 
items or services in excess of, or more expensive than, those 
factored into the PPS payment for covered care.
---------------------------------------------------------------------------

    The regulatory text we are proposing largely tracks the statute and 
is similar to the text proposed in 1994. Besides codifying the 
gainsharing prohibition itself, we propose to add a definition of 
``hospital'' to proposed section 42 CFR 1003.110 (current Sec.  
1003.101). This definition would refer to the definitions of 
``hospital'' and ``critical access hospital'' in the Act. In addition, 
however, we are considering and solicit comments on whether we should 
include a definition of the term ``reduce or limit services'' to 
address the considerations we express above. If so, we solicit specific 
proposals and safeguards that we should include in this definition to 
ensure that the goal of the statute is met: To prevent hospitals from 
paying physicians to discharge patients too soon or take other action 
that inappropriately limits a beneficiary's care. We are not proposing 
text of a definition at this time. We specifically solicit comments on 
the following areas of concern, but we welcome any other comments 
relating to the topic:
     We have interpreted the prohibition on payments to reduce 
or limit services as including payments to limit items used in 
providing services, which is consistent with the definition of 
``services'' found at 42 CFR 400.202. Is this interpretation 
appropriate or necessary in the context of the Gainsharing CMP?
     Should a hospital's decision to standardize certain items 
(e.g., surgical instruments, medical devices, or drugs) be deemed to 
constitute reducing or limiting care? Would the answer be the same if 
the physicians were simply encouraged to choose from the standardized 
items, but other items remained available for use when deemed 
appropriate for any particular patient?
     Should a hospital's decision to rely on protocols based on 
objective quality metrics for certain procedures ever be deemed to 
constitute reducing or limiting care (e.g., protocols calling for the 
discontinuance of a prophylactic antibiotic after a specific period of 
time)? Should hospitals deciding to compensate physicians in connection 
with the use of such protocols be required to maintain quality-
monitoring procedures to ensure that these protocols do not, even 
inadvertently, involve reductions in care? What types of monitoring and 
documentation would be reasonable and appropriate?
     Should a hospital desiring to standardize items or 
processes as part of a gainsharing program be required to establish 
certain thresholds based on historical experience or clinical 
protocols, beyond which participating physicians could not share in 
cost savings (i.e., change beyond the relevant threshold would be 
deemed to constitute reducing or limiting services)? For example, in 
OIG Advisory Opinion 05-01, the hospital had a policy of performing 
blood cross-matching (in addition to typing and screening) in all cases 
and proposed to perform cross-matching only when a patient required a 
transfusion. The facts in that opinion were that less than 30 percent 
of cases actually required transfusions, so 30 percent was used as the 
threshold. Therefore, the surgeon group would not receive any share of 
savings resulting from performing cross-matching in fewer than 30 
percent of cases.
     If we define ``reduce or limit services,'' should the 
regulation include a requirement that the hospital and/or physician 
participating in a gainsharing program notify potentially affected 
patients about the program? Would such a requirement help ensure that 
gainsharing payments were for legitimate purposes and not for the 
purpose of reducing or limiting care?
    Our proposal to define the term ``reduce or limit services'' and 
our solicitation of comments related to that definition reflect our 
recognition that the delivery of health care, and the potential 
safeguards to protect patients and promote accountability for outcomes, 
has been changing. We seek to interpret the statutory prohibition 
broadly enough to protect beneficiaries and Federal health care 
programs, but narrowly enough to allow low risk programs that further 
the goal of delivering high quality health care at a lower cost. We 
emphasize that this proposed regulation would interpret the Gainsharing 
CMP. We have no authority to create an exception to the statute.

III. Regulatory Impact Statement

    We have examined the impact of this proposed rule as required by 
Executive Order 12866, the Regulatory Flexibility Act (RFA) of 1980, 
the Unfunded Mandates Reform Act of 1995, and Executive Order 13132.

Executive Order 12866

    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulations are 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects; distributive impacts; and equity). A regulatory impact 
analysis must be prepared for major rules with economically significant 
effects, i.e., $100 million or more in any given year. This is not a 
major rule as defined at 5 U.S.C. 804(2); it is not economically 
significant because it does not reach that economic threshold.
    This proposed rule would implement or codify new and existing CMP 
authorities and exceptions and implement new or revised anti-kickback 
statute safe harbors. The vast majority of providers and Federal health 
care programs would be minimally impacted, if at all, by these proposed 
revisions.
    The changes to the safe harbors and CMP authorities and exceptions 
would allow providers to enter into certain beneficial arrangements. In 
doing so, this regulation would impose no requirements on any party. 
Providers would be allowed to voluntarily seek to comply with these 
provisions so that they would have assurance that participating in 
certain agreements would not subject them to liability under the anti-
kickback statute and the beneficiary inducement or gainsharing CMPs. 
These safe harbors and exceptions facilitate providers' ability to 
provide important health care and related services to communities in 
need. We believe that the aggregate economic impact of the changes to 
these regulations would be minimal and

[[Page 59731]]

would have no effect on the economy or on Federal or State 
expenditures.
    Accordingly, we believe that the likely aggregate economic effect 
of these regulations would be significantly less than $100 million.

Regulatory Flexibility Act

    The RFA and the Small Business Regulatory Enforcement and Fairness 
Act of 1996, which amended the RFA, require agencies to analyze options 
for regulatory relief of small businesses. For purposes of the RFA, 
small entities include small businesses, non-profit organizations, and 
government agencies. Most providers are considered small entities by 
having revenues of $7 million to $35.5 million or less in any one year. 
For purposes of the RFA, most physicians and suppliers are considered 
small entities.
    The changes to the CMP provisions would be minimal, and the changes 
to the anti-kickback statute safe harbors would not significantly 
affect small providers as these would not impose any requirement on any 
party.
    In summary, we have concluded that this proposed rule should not 
have a significant impact on the operations of a substantial number of 
small providers and that a regulatory flexibility analysis is not 
required for this rulemaking.
    In addition, section 1102(b) of the Act (42 U.S.C. 1302) requires 
us to prepare a regulatory impact analysis if a rule under Titles XVIII 
or XIX or section B of Title XI of the Act may have a significant 
impact on the operations of a substantial number of small rural 
hospitals. For the reasons stated above, we do not believe that any 
provisions or changes proposed here would have a significant impact on 
the operations of rural hospitals. Thus, an analysis under section 
1102(b) is not required for this rulemaking.

Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 
104-4, also requires that agencies assess anticipated costs and 
benefits before issuing any rule that may result in expenditures in any 
one year by State, local, or tribal governments, in the aggregate, or 
by the private sector, of $100 million, adjusted for inflation. We 
believe that no significant costs would be associated with these 
proposed revisions that would impose any mandates on State, local, or 
tribal governments or the private sector that would result in an 
expenditure of $141 million (after adjustment for inflation) in any 
given year.

Executive Order 13132

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a rule that imposes substantial 
direct requirements or costs on State and local governments, preempts 
State law, or otherwise has Federalism implications. In reviewing this 
rule under the threshold criteria of Executive Order 13132, we have 
determined that this proposed rule would not significantly affect the 
rights, roles, and responsibilities of State or local governments.

IV. Paperwork Reduction Act

    This document does not impose information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995.

List of Subjects

42 CFR Part 1001

    Administrative practice and procedure, Fraud, Grant programs--
health, Health facilities, Health professions, Maternal and child 
health, Medicaid, Medicare.

42 CFR Part 1003

    Fraud, Grant programs--health, Health facilities, Health 
professions, Medicaid, Reporting and recordkeeping.

    For the reasons set forth in the preamble, the Office of Inspector 
General, Department of Health and Human Services, proposes to amend 42 
CFR chapter V as follows:

PART 1001--PROGRAM INTEGRITY--MEDICARE AND STATE HEALTH CARE 
PROGRAMS

0
1. The authority citation for part 1001 continues to read as follows:

    Authority: 42 U.S.C. 1302, 1320a-7, 1320a-7b, 1395u(j), 
1395u(k), 1395w-104(e)(6), 1395y(d), 1395y(e), 1395cc(b)(2)(D), (E) 
and (F), and 1395hh; and sec. 2455, Public Law 103-355, 108 Stat. 
3327 (31 U.S.C. 6101 note).

0
2. Section 1001.952 is amended by revising paragraphs (f)(2), (k) 
introductory text, and by adding paragraphs (k)(3), (k)(4), (z), (aa), 
and (bb) to read as follows:


Sec.  1001.952  Exceptions.

* * * * *
    (f) * * *
    (2) Any payment the participant makes to the referral service is 
assessed equally against and collected equally from all participants 
and is based only on the cost of operating the referral service, and 
not on the volume or value of any referrals to or business otherwise 
generated by either party for the other party for which payment may be 
made in whole or in part under Medicare, Medicaid, or ther Federal 
health care programs.
* * * * *
    (k) Waiver of beneficiary coinsurance and deductible amounts. As 
used in section 1128B of the Act, ``remuneration'' does not include any 
reduction or waiver of a Medicare or a State health care program 
beneficiary's obligation to pay coinsurance or deductible amounts as 
long as all the standards are met within one of the following 
categories of health care providers or suppliers.
* * * * *
    (3) If the copayment, coinsurance, or deductible amounts are owed 
to a pharmacy (including, but not limited to, pharmacies of the Indian 
Health Service, Indian tribes, tribal organizations, and urban Indian 
organizations) for cost-sharing imposed under part D of Title XVIII 
provided that--
    (i) The waiver is not offered as part of an advertisement or 
solicitation and
    (ii) Except for waivers or reductions offered to subsidy-eligible 
individuals (as defined in section 1860D-14(a)(3)) to which only 
requirement in paragraph (k)(3)(i) of this section applies:
    (A) The pharmacy does not routinely waive copayment, coinsurance, 
or deductible amounts and
    (B) The pharmacy waives the copayment, coinsurance, or deductible 
amounts only after determining in good faith that the individual is in 
financial need or fails to collect the copayment, coinsurance, or 
deductible after making reasonable collection efforts.
    (4) If the coinsurance or deductible amounts are owed to an 
ambulance provider or supplier for emergency ambulance services for 
which Medicare pays under a fee-for-service payment system and all the 
following conditions are met:
    (i) The ambulance provider or supplier is owned and operated by a 
State, a political subdivision of a State, or a federally recognized 
Indian tribe;
    (ii) The ambulance provider or supplier is the Medicare Part B 
provider or supplier of the emergency ambulance services;
    (iii) The ambulance provider's or supplier's reduction or waiver of 
coinsurance or deductible amounts is not considered to be the 
furnishing of free services paid for directly or indirectly by a 
government entity;

[[Page 59732]]

    (iv) The ambulance supplier offers the reduction or waiver on a 
uniform basis, without regard to patient-specific factors; and
    (v) The ambulance provider or supplier must not later claim the 
amount reduced or waived as a bad debt for payment purposes under 
Medicare or otherwise shift the burden of the reduction or waiver onto 
Medicare, a State health care program, other payers, or individuals.
* * * * *
    (z) As used in section 1128B of the Act, ``remuneration'' does not 
include any remuneration between a federally qualified health center 
(or an entity controlled by such a health center) and a Medicare 
Advantage organization pursuant to a written agreement described in 
section 1853(a)(4) of the Act.
    (aa) Medicare Coverage Gap Discount Program. As used in section 
1128B of the Act, ``remuneration'' does not include a discount in the 
price of a drug when the discount is furnished to a beneficiary under 
the Medicare Coverage Gap Discount Program established in section 
1860D-14A of the Act, so long as all the following requirements are 
met:
    (1) The discounted drug meets the definition of ``applicable drug'' 
set forth in section 1860D-14A(g) of the Act;
    (2) The beneficiary receiving the discount meets the definition of 
``applicable beneficiary'' set forth in section 1860D-14A(g) of the 
Act; and
    (3) The manufacturer of the drug participates in, and is in full 
compliance with all requirements of, the Medicare Coverage Gap Discount 
Program.
    (bb) Local Transportation. As used in section 1128B of the Act, 
``remuneration'' does not include free or discounted local 
transportation made available by an Eligible Entity (as defined in this 
paragraph (bb)) to established patients who are Federal health care 
program beneficiaries for the purpose of obtaining medically necessary 
items or services if all the following conditions are met:
    (1) The availability of the free or discounted local transportation 
services is not determined in a manner related to the past or 
anticipated volume or value of Federal health care program business;
    (2) The free or discounted local transportation services do not 
take the form of air, luxury, or ambulance-level transportation;
    (3) The free or discounted local transportation services are not 
marketed or advertised, no marketing of health care items and services 
occurs during the course of the transportation or at any time by 
drivers who provide the transportation, and drivers or others arranging 
for the transportation are not paid on a per-beneficiary transported 
basis;
    (4) The Eligible Entity that makes the free or discounted 
transportation available furnishes the services only:
    (i) To the established patient (and, if needed, a person to assist 
the patient) to obtain medically necessary items or services, and
    (ii) Within the local area of the health care provider or supplier 
to which the patient would be transported;
    (5) The Eligible Entity that makes the transportation available 
bears the costs of the free or discounted local transportation services 
and does not shift the burden of these costs onto Medicare, a State 
health care program, other payers, or individuals.
    Note to paragraph (bb): For purposes of this paragraph (bb), an 
``Eligible Entity'' is any individual or entity, except for individuals 
or entities (or family members or others acting on their behalf) that 
primarily supply health care items; and if the distance from the 
patient's location to the provider or supplier to which the patient 
would be transported is no more than 25 miles, the transportation is 
deemed to be local.

PART 1003--CIVIL MONEY PENALTIES, ASSESSMENTS AND EXCLUSIONS

0
3. The authority citation for part 1003 continues to read as follows:

    Authority: 42 U.S.C. 262a, 1302, 1320-7, 1320a-7a, 1320b-10, 
1395u(j), 1395u(k), 1395cc(j), 1395w-141(i)(3), 1395dd(d)(1), 
1395mm, 1395nn(g), 1395ss(d), 1396b(m), 11131(c), and 11137(b)(2).

0
4. Section 1003.101 as proposed to be redesignated as 1003.110 and 
amended at 79 FR 27080 (May 12, 2014) is further amended by adding the 
definition of ``Hospital'' and by amending the definition of 
``Remuneration'' by revising the introductory text and adding 
paragraphs (5) through (9) to read as follows:


Sec.  1003.101  Definitions.

* * * * *
    Hospital means a hospital as defined in section 1861(e) of the Act 
or critical access hospital as defined in section 1861(mm)(1) of the 
Act.
* * * * *
    Remuneration, for the purposes of Sec.  1003.1000(a) of this part, 
is consistent with the definition in section 1128A(i)(6) of the Act and 
includes the waiver of coinsurance and deductible amounts (or any part 
thereof) and transfers of items or services for free or for other than 
fair market value. The term ``remuneration'' does not include--
* * * * *
    (5) A reduction in the copayment amount for covered OPD services 
under section 1833(t)(8)(B) of the Act;
    (6) [Reserved];
    (7) The offer or transfer of items or services for free or less 
than fair market value by a person if--
    (i) The items or services consist of coupons, rebates, or other 
rewards from a retailer;
    (ii) The items or services are offered or transferred on equal 
terms available to the general public, regardless of health insurance 
status; and
    (iii) The offer or transfer of the items or services is not tied to 
the provision of other items or services reimbursed in whole or in part 
by the program under title XVIII or a State health care program (as 
defined in section 1128(h) of the Act);
    (8) The offer or transfer of items or services for free or less 
than fair market value by a person, if--
    (i) The items or services are not offered as part of any 
advertisement or solicitation;
    (ii) The offer or transfer of the items or services is not tied to 
the provision of other items or services reimbursed in whole or in part 
by the program under Title XVIII or a State health care program;
    (iii) There is a reasonable connection between the items or 
services and the medical care of the individual; and
    (iv) The person provides the items or services after determining in 
good faith that the individual is in financial need;
    (9) Waivers by a sponsor of a Prescription Drug Plan under part D 
of Title XVIII or a Medicare Advantage organization offering an MA-PD 
Plan under part C of such title of any copayment for the first fill of 
a covered Part D drug (as defined in section 1860D-2(e)) that is a 
generic drug (as defined in 42 CFR 423.4) for individuals enrolled in 
the Prescription Drug Plan or MA-PD Plan, respectively, as long as such 
waivers are included in the benefit design package submitted to CMS. 
This exception is effective for coverage years beginning after 
publication of the final rule.
* * * * *
0
5. Part 1003, as proposed to be amended at 79 FR 27080, (May 12, 2014) 
is further amended by adding subpart G to read as follows:

Subpart G--CMPs for Gainsharing Violations

Sec.
1003.700 Basis for civil money penalties.

[[Page 59733]]

1003.710 Amount of penalties.
1003.720 Determinations regarding the amount of penalties.


Sec.  1003.700  Basis for civil money penalties.

    OIG may impose a penalty against any person who it determines in 
accordance with this part--
    (a) Is a hospital that knowingly makes a payment, directly or 
indirectly, overtly or covertly, in cash or in kind, to a physician as 
an inducement to reduce or limit services provided to an individual who 
is eligible for Medicare or Medicaid benefits and who is under the 
direct care of the physician;
    (b) Is a physician who knowingly receives a payment described in 
paragraph (a) of this section.


Sec.  1003.710  Amount of penalties.

    (a) OIG may impose a penalty against a hospital of not more than 
$2,000 for each individual for whom payment was made to a physician in 
violation of Sec.  1003.700.
    (b) OIG may impose a penalty against a physician of not more than 
$2,000 for each individual for whom the physician received payment from 
a hospital in violation of Sec.  1003.700.


Sec.  1003.720  Determinations regarding the amount of penalties.

    In determining the amount of any penalty or assessment, OIG will 
consider the factors listed in Sec.  1003.140, as well as the 
following:
    (a) The nature of the payment designed to reduce or limit services 
and the circumstances under which it was made,
    (b) The extent to which the payment encouraged the limiting of 
medical care or the premature discharge of the patient,
    (c) The extent to which the payment caused actual or potential harm 
to program beneficiaries, and
    (d) The financial condition of the hospital (or physician) involved 
in the offering (or acceptance) of the payment.

    Dated: March 1, 2014.
Daniel R. Levinson,
Inspector General.
    Approved: September 18, 2014.
Sylvia M. Burwell,
Secretary.
[FR Doc. 2014-23182 Filed 10-2-14; 8:45 am]
BILLING CODE 4152-01-P