Medical Assistance

The “Other” Safe Harbor: OIG Warns Healthcare Providers and Vendors Against Information Blocking and Federal Anti-Kickback Violations

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For those of us who work in the privacy and security space this past week has been a whirlwind with focus on the ramifications of the European Court of Justice (ECJ) decision invalidating the EU-U.S. Safe Harbor Agreement.  Much has been written on the EU-U.S. Safe Harbor Agreement and much more will be written in the coming weeks.  See Cozen O’Connor’s Cyber Law Monitor recent blog post, The End of Safe Harbor – What Does it Mean?   However, the ECJ decision was not the only news on safe harbor last week.  The U.S. Department of Health and Human Services, Office of Inspector General (“OIG”) issued their thoughts on data arrangements and safe harbor, albeit a much different safe harbor than the EU-U.S. Safe Harbor Agreement.  Healthcare providers and health IT vendors should pay close attention to OIG’s Alert.  See October 6, 2015 OIG Alert.

OIG issued the Alert during National Health IT Week and described it as a “Policy Reminder” on Information Blocking and the Federal Anti-Kickback Statute (42 U.S.C. 1320a-7b (b)).  The Federal Anti-Kickback statute prohibits individuals and entities from knowingly and willfully offering, paying, soliciting, or receiving remuneration to induce or reward referrals of business reimbursable under any Federal health care program (“FHCP”).  The Alert addresses a growing trend in the industry, arrangements involving the provision of software or information technology to a referral source.  Although there is a safe harbor for electronic health records (“EHR”) arrangements it “must fit squarely in all safe harbor conditions to be protected.” 42 CFR § 1001.952(y).

In its alert, OIG focused on the parameters of the safe harbor exception that allows donors to enter into a wide variety of arrangements involving EHR software, IT, and training services, provided there are no restrictions to the use, compatibility, or interoperability of donated items or services.  42 CFR § 1001.952(y)(3).  OIG provided guidance on this issue in 2013, explicitly stating that if the interoperability of an item or service is restricted by the donor or anyone acting on the donor’s behalf, including the recipient, then the donation violates the exemption and thus will be actionable under the Federal anti-kickback statute.

OIG’s Alert highlights practices outlined in its 2013 guidance that would be actionable under the Federal anti-kickback statute.  For example, an agreement between a donor and a recipient to limit a competitor from interfacing with the donated items or services would be actionable.  Even an agreement between a donor and an EHR technology vendor to charge non-recipient providers, non-recipient suppliers, or competitors’ high fees may be actionable.

OIG also provided an open invitation to whistleblowers to report fraud by urging persons with knowledge of violations of the safe harbor to be vigilant in reporting potential violations to their office.  Violations will occur when donors engage in information blocking, which refers to practices that unreasonably block the sharing of electronic health information (EHI).  OIG provided three criteria in a 2015 report for identifying practices that qualify as information blocking:

  1. Interference with the ability of authorized people to access, exchange, or otherwise use EHI.
  2. Knowledge, actual or expected under the circumstances, that the practice will be considered information blocking.
  3. No reasonable justification for limiting sharing of EHI.

If all three criteria are met, then the practice in question is considered information blocking.

For more information on this Alert, contact Ryan P. Blaney or any member of Cozen O’Connor’s Health Care team.

Ryan Blaney

Ryan Blaney

Ryan Blaney joined Cozen O'Connor as a member of the firm's Health Law group. Ryan practices in the firm's Washington, D.C., office. He focuses his practice on representing clients in the health care and life sciences industries in a wide range of matters, including health care fraud and abuse, civil and criminal government investigations, qui tam and whistle-blower disputes under the False Claims Act and other federal and state laws and regulations, HIPAA privacy and data security, compliance and transactional services, and antitrust matters.

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CMS Approves Pennsylvania’s Medical Assistance (Medicaid) Waiver

Posted by J. Nicole Martin on September 08, 2014
Medicaid, Medical Assistance / No Comments

CMS approved Pennsylvania’s Medical Assistance (“Medicaid”) waiver request entitled Healthy Pennsylvania (“Waiver” or “Healthy Pennsylvania”) by letter dated August 28, 2014.  Governor Tom Corbett and the Pennsylvania Department of Welfare submitted the waiver application in February. The approval paves the way for a five-year demonstration project that begins on January 1, 2015 and is intended to “expand access to coverage to adults in Pennsylvania with incomes through 133 percent of the federal poverty level.” The Waiver includes changes that will be implemented through state Medicaid plan amendments and the demonstration project.

Waiver Priorities

  • Improving access;
  • Ensuring quality; and
  • Providing affordability.

Waiver Objectives

  • Promoting access to health insurance through the private insurance marketplace;
  • Encouraging healthy behaviors and appropriate care, including early intervention, prevention, and wellness; and
  • Increasing quality of care and efficiency of the health care delivery system.

Waiver Highlights (applicable to individuals enrolled in Medicaid and Healthy PA PCO)

  • Inclusion of a private coverage option, Healthy PA PCO, which will make coverage available through a private commercial market that will operate outside of the Pennsylvania’s federally-run exchange
  • Commercial insurance carriers, who are likely to be HealthChoices MCOs, will offer at least two health plans for individuals eligible for Healthy PA PCO
  • Inclusion of Medicaid plan options categorized as “low risk” or “high risk” (these plans are not yet finalized and the parameters will be subject to negotiation with CMS)
  • No premiums are required in year one
  • Monthly premiums are required in year two for eligible individuals who have incomes greater than 100% of the federal poverty level (up to 2% of their income with the ability to reduce the premium based on healthy behaviors)
  • Individuals enrolled in Healthy PA PCO and Medicaid will pay an amount equal to currently existing Medicaid copayments in year one of Healthy Pennsylvania’s implementation
  • Elimination of copayments, except for $8 co-payments for non-emergency visits to emergency rooms, beginning in year two of Healthy Pennsylvania’s implementation

The Hospital & Healthsystem Association of Pennsylvania recently announced its support of Healthy Pennsylvania’s goals. Despite those who oppose Healthy Pennsylvania because among other reasons, it is viewed as not being the “traditional” Medicaid expansion as envisioned by the Affordable Care Act, Governor Tom Corbett anticipates that Healthy PA PCO will increase access to health care for over 600,000 eligible Pennsylvanians. Notably, CMS did not approve the proposed work search requirement, which would have required certain adults to undertake work search activities in order to qualify and remain eligible for health coverage under Healthy Pennsylvania. According to CMS, the approval of Pennsylvania’s Waiver makes it one of 28 states, including the District of Columbia, to expand Medicaid.

For more information regarding the Waiver, please contact Mark Gallant, Chris Raphaely, or J. Nicole Martin.

J. Nicole Martin

J. Nicole Martin

J. Nicole Martin is an associate and practices in the Health Care Practice Group. Nicole assists accountable care organizations, health care systems, long term care providers, behavioral and mental health providers, medical device manufacturers, physician practices and pharmacies with their compliance, regulatory and transactional needs. Nicole’s practice includes providing clients with counsel regarding HIPAA/HITECH and state privacy and security laws, data breaches, business associate and covered entity obligations, licensure laws, Medicare, Medicaid and third-party payer matters, medical staff issues, and fraud and abuse laws. Nicole also represents clients undergoing changes of ownership and changes of control, and assists them with the transactional, regulatory and compliance requirements necessary to finalize the transactions.

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