New AKS Safe Harbors Finalized

December 3, 2020 | Geoffrey R. Kaiser | Electronic Health Records | Fraud and Abuse | Hospitals | Legislation and Public Policy | Medical Devices and Wearables | Medicare and Medicaid | Pharmaceuticals | Telehealth

The Office of Inspector General, Department of Health and Human Services (OIG) has finalized new safe harbors and modifications of existing safe harbors under the federal Anti-Kickback Statute (AKS) to reflect a policy priority favoring a value-based health care system that “pays for health and outcomes” and that will “remove potential barriers to more effective coordination and management of patient care and delivery of value-based care.”

In total, there are seven new safe harbors and four modifications to existing safe harbors. Each has its own elements that must be satisfied for the arrangement to be protected. The Final Rule becomes effective January 19, 2021.

Certain entities, deemed by OIG not to be on the front lines of care coordination and that pose a higher risk of fraud or abuse, are ineligible to use certain new safe harbors for value-based arrangements, outcomes-based payments and patient engagement. These entities include pharmaceutical and device manufacturers, compounding pharmacies and DME suppliers; however, there is an exception, in the case of device and DME companies, for care coordination arrangements involving in-kind remuneration consisting of digital health technology. Even ineligible entities, however, may be able to use other new or modified safe harbors.

The Final Rule also codifies an exception to the prohibition of beneficiary inducements under the Civil Monetary Penalties Law (CMPL) for telehealth technologies furnished to certain in-home dialysis patients, and notes that by operation of law any arrangements that fit in the new and modified AKS safe harbors for patient engagement and support and local transportation are also protected under that CMPL provision.

The new AKS safe harbors and modifications are:

Value-Based Arrangements

These safe harbors cover remuneration exchanged between or among participants in a value-based arrangement that fosters better coordinated and managed patient care, including:

  • care coordination arrangements to improve quality, health outcomes, and efficiency without requiring the parties to assume risk (42 CFR §1001.952(ee));
  • value-based arrangements with substantial downside financial risk (42 CFR §1001.952(ff)); and
  • value-based arrangements with full financial risk (42 CFR §1001.952(gg)).

These safe harbors are intended to provide “flexibility for innovation and customization of value-based arrangements to the size, resources, needs, and goals of the parties to them,” including “emerging arrangements that reflect up-to-date understanding in medicine, science, and technology.” All three safe harbors provide protection for in-kind remuneration, but only the two safe harbors with substantial assumption of risk protect monetary remuneration. OIG noted, however, that “parties to arrangements involving monetary remuneration, such as shared savings or performance bonus payments, may be eligible for the new protection for outcomes-based payments at [§1001.952(d)(2)]” and “parties to arrangements under CMS-sponsored models may prefer to look to the new safe harbor specifically for those models [§1001.952(ii)].”

Patient Engagement and Support

This safe harbor permits certain tools and supports furnished by a participant in a value-based enterprise to patients to improve quality, health outcomes and efficiency [§1001.952(hh)]. As with the value-based safe harbors, this safe harbor is not available to the same group of ineligible entities, except that a device manufacturer may provide a patient engagement tool or support that consists of digital health technology.

CMS-Sponsored Models

This safe harbor protects remuneration provided in connection with certain CMS-sponsored models (i.e., Medicare shared savings program or other model being tested by CMS under 42 USC 1315a(b)) [§1001.952(ii)]. This safe harbor is “intended to provide greater predictability for model participants and uniformity across models” and “will reduce the need for separate OIG fraud and abuse waivers for new CMS-sponsored models.”

Cybersecurity Technology and Services

This safe harbor protects donations of cybersecurity technology and services. It is intended to “facilitate improved cybersecurity in health care and is available to all types of individuals and entities.” [§1001.952(jj)]

Electronic Health Records Safe Harbor

The existing safe harbor for electronic health records items and services has been modified to “update and remove provisions regarding interoperability, remove the sunset provision and prohibition on donation of equivalent technology, and clarify protections for cybersecurity technology and services included in and electronic health records arrangement.” [§1001.952(y)]

Personal Services and Management Contracts and Outcomes-Based Payments

The existing safe harbor for personal services and management contracts has been modified “to increase flexibility for part-time or sporadic arrangements and arrangements for which aggregate compensation is not known in advance.” The safe harbor also adds new protection “for certain outcomes-based payments and part-time arrangements.” [§1001.952(d)]. The added protection is “tied to achieving measurable outcomes that improve patient or population health or appropriately reduce payor costs.” The same ineligible entities list applies to this safe harbor.


The existing safe harbor for warranties has been modified to revise the definition of “warranty” and provide protection for bundled warranties for one or more items and related services. OIG noted that the safe harbor “could extend to arrangements conditioned on clinical outcomes guarantees, which could include warranties conditioned upon ‘value-based’ outcomes that meet the safe harbor’s other requirements.” This safe harbor is available to all types of entities. [§1001.952(g)]

Local Transportation

The existing safe harbor for local transportation has been modified to expand mileage limits for rural areas (up to 75 miles) and “eliminate mileage limits for transportation to convey patients discharged from the hospital to their place of residence” when discharged from an inpatient facility or released from a hospital after being placed on observation for at least 24 hours. The safe harbor also clarifies that it is available for transportation provided through rideshare arrangements. [§1001.952(bb)]

ACO Beneficiary Incentives

The Final Rule also codifies the statutory exception to the definition of remuneration at 42 USC §1320a-7b(b)(3)(K) related to ACO Beneficiary Incentive Programs for the Medicare Shared Savings Program. [§1001.952(kk)]

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