The healthcare community long has sought the adoption of mechanisms to obtain increased certainty concerning the interpretation of the Medicare/Medicaid anti-kickback statute. This year's focus has been on creating an advisory opinion procedure for HHS' office of the inspector general.
National healthcare reform has been shelved for the year, but initiatives that would expand the fraud and abuse statutes to all payers are expected to be on the agenda next year, with advisory opinions potentially a part of the legislative package.
While such a mechanism has pros and cons, Congress may be attempting to forge a compromise that would be the worst of all worlds-one that would keep the healthcare industry in a continual process of requesting guidance, which the inspector general would not be obligated to furnish.
A vague statute.Enacted in its present form in 1977, the statute-which essentially prohibits the offer, receipt, payment or solicitation of remuneration to induce Medicare and Medicaid referrals-has been interpreted in novel ways that call into question many of healthcare providers' common business arrangements. Recently, several national, publicly traded companies-notably National Medical Enterprises, Caremark and T2 Medical-have been in the spotlight for purported anti-kickback violations. As a result, the healthcare community has stepped up its quest for guidance.
Now, the primary focus is on getting Congress to adopt an advisory opinion mechanism, which would enable providers to submit a written description of a business arrangement to the inspector general's office and receive a written response regarding any possible violations of the anti-kickback statute.
Proponents of advisory opinions point to the need for certainty concerning healthcare transactions in light of the broad and vague anti-kickback law. Although the government likely would charge user fees for providing the opinions, proponents say it would be a small price to pay for such certainty. Even if the advisory opinion is negative, at least there would be a level playing field in the marketplace, and competitors would not be able to gain an advantage without engaging in conduct that plainly violated the law.
It's important to remember, however, that advisory opinions can only interpret the underlying statutory language. The inspector general's office already has taken overly broad positions regarding anti-kickback violations, and there is certainly the possibility that the inspector general's office could outlaw pro-competitive and otherwise beneficial activities among healthcare providers simply by issuing an advisory opinion. Moreover, because the statute also forbids the "offer" of remuneration, it's possible that even a proposed arrangement, described in a mere request for an advisory opinion, may violate the statute.
Perhaps surprisingly, considering the increase in staff that would be necessary to respond to advisory opinion requests, the inspector general's office has been vociferous in its opposition. Officials contend the advisory opinions would impede the prosecution of unlawful activities. Unscrupulous providers would misinterpret the facts and then, upon prosecution, could provide an advisory opinion that immunizes their conduct, or at least casts reasonable doubt on the case, preventing the imposition of penalties.
Call for compromise.Although advisory opinion authorization was introduced in the House of Representatives during this past session, the Senate, aware of opposition from the inspector general, drafted language that attempts to find a middle ground. Rather than a mandatory advisory opinion process, the compromise would establish a discretionary process involving an annual "public call" for new safe harbors and a new mechanism for the inspector general's office to issue interpretive rulings and special fraud alerts. Safe-harbor criteria would include considerations of healthcare access, quality, freedom of choice, competition, cost and utilization.
It's important to note that interpretive rulings differ significantly from advisory opinions. Unlike advisory opinions, interpretive rulings would not make determinations on factual issues, but would merely attempt to resolve ambiguities with the statute, safe harbor or previous interpretive ruling. An example of such a ruling would be for the inspector general to define the term "family member" as used in safe-harbor regulations.
But any mechanism that doesn't give guidance on factual issues is virtually useless. It's the particular facts of an arrangement that dictate its vulnerability under the anti-kickback statute.
Ultimately, this compromise is not what the healthcare community envisioned when it began its quest for advisory opinions. It would not give the inspector general's office any new authority and would impose virtually no new statutory obligations.
The inspector general's office already has safe-harbor authority, which it has exercised. It has issued a number of fraud alerts and has been promising interpretive rulings since the issuance of the first set of safe harbors in 1991. Despite many requests, the office has yet to issue a single interpretive ruling. Under the compromise proposal, it's likely the healthcare community would expend considerable resources making annual requests for new safe harbors, with the inspector general's office under no obligation to take any action.
What the healthcare industry really wants from the inspector general's office is a continuing dialogue, similar to the dialogue that exists with other agencies that regulate healthcare, such as the Federal Trade Commission and the Internal Revenue Service. The goal is to further the development of a reasonable government policy on fraud and abuse issues-one that facilitates enforcement against the "bad guys" but still enables the "good guys" to do business.
The compromise proposed in Washington would foster an increasingly adversarial relationship, with little promise of reasonable policy. Rather than yet another layer of bureaucracy, perhaps a modification of the underlying anti-kickback law is what's ultimately needed to resolve the ambiguity and answer all the questions.