Safe Harbor Paves the Way for Merit-Based Incentive Payment System (MIPS), Value-Based Reimbursement

Posted on 19 Jan, 2018 |comments_icon 0|By Elizabeth

On Dec. 7, 2016, the Federal Register published a final rule from the HHS OIG that seemed to speak to many providers’ frustrations about the AKS rules regarding safe harbors.

The report offered an olive branch to physicians and their business partners with revisions to old standbys that suggested easing up on regulations to promote the delivery of coordinated care.

“Although the rulemaking finalizes ten new AKS and beneficiary inducement CMP exceptions/safe harbors, a number of them apply only in very narrow circumstances,” says Christopher G. Janney, Esq. of Dentons US LLP in Washington D.C. “Three of them, however, are broadly applicable and significant.”

Here are the three most important ones that Janney suggests you know:

  • The new AKS safe harbor for local transportation
  • The new CMP exception for items and services that improve a beneficiary’s ability to obtain covered care and pose a low risk of program harm
  • The new CMP exception for medical items and services provided to those in financial need

Some of the other CMP exceptions and safe harbors are:

  • Cost-sharing waivers for Medicare Part D beneficiaries with financial need
  • Cost-sharing waivers for emergency ambulance services
  • Discounts for drugs under the Medicare Coverage Gap Discount Program
  • Copayment reductions for certain outpatient services
  • Coupons, rebates, and rewards for certain retailers
  • Medicare Advantage organizations and federally-qualified health center changes
  • Reductions on the first prescription of generic drugs

Here’s the Caveat:

The new OIG offerings are a boon to the industry at large, but stipulations do exist and there are some exceptions.

“Each of these safe harbors and exceptions have multiple conditions,” Janney explains. “Moreover, several of these conditions will require providers to make sometimes difficult judgment calls as to whether a particular offering is on the right side of what remain somewhat blurry lines.”

Local transport

Example: Under the AKS safe harbor for local transportation, the beneficiary receiving the service must be an “established patient” — a person who has selected and initiated contact with a provider or supplier to schedule an appointment or who has given consent to someone to do it for them — and has a medically necessary need for it, the final rule suggests.

In addition, the transportation covers only 25 urban miles or 50 rural miles to a home health facility, pharmacy, or lab and will not be covered if the transport is air, luxury, or ambulance-level transportation.

Despite the minutia, the new safe harbor options echo governmental efforts to put patients’ needs first. “Overall, however, these provisions significantly expand the universe of free and discounted items and services that hospitals, physicians, and other providers may furnish to Medicare, Medicaid, and other federal healthcare program beneficiaries,” Janney maintains.

Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is at the Heart of Quality

The past few months have seen one initiative after another fall into place, promoting quality, patient-centered care. With MACRA having been launched in January 2017, the HHS, CMS, and their affiliates have created a stairway to success for those providers and suppliers willing to step up.

“There is no question that many of these changes are being driven by the seemingly inexorable move from a fundamentally ‘fee-for-service’ reimbursement model to a fundamentally ‘managed care’ reimbursement model,” Janney explains. “The AKS and beneficiary inducement CMP are creatures of a fee-for-service world; everything being equal, their policy objectives do not align well with a managed care world; and Congress, CMS, and HHS OIG recognize this, as reflected in rulemakings such as this.”

Final Note: In the past, commercially-insured patients have reaped many of the benefits that fall under these safe harbor changes while those covered under federal healthcare have been left to the wayside. “Many coupon, discount, and other reward programs have historically carved-out Medicare and Medicare beneficiaries,” Janney says. “These new rulemakings are, at least in part, an effort to level the playing field a bit.”

Learn More

Is your staff adequately trained to avoid AKS, Stark, OSHA, FCA, MACs, RACs, EMTALA, and HIPAA violations?

From start to finish, The Physician Practice Compliance Sourcebook will equip you to plan and execute a compliance program that meets federal and state laws requirements.



Elizabeth works on an array of projects at TCI, researching and writing about modern reimbursement challenges. Since joining TCI in 2017, she has also covered the nuts and bolts of cybersecurity, compliance with federal laws, and how to tap into the advantages of telehealth services.

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