Skip to content

Brief Overview of Anti-Kickback Statute Final Rule

November 21, 2020

On November 20, 2020, the U.S. Department of Health and Human Services Office of Inspector General (the “OIG”) released the much anticipated Anti-Kickback Statute final rule.  This final rule modifies existing Anti-Kickback safe harbors and also creates new safe harbors.  We are in the process of reviewing the OIG’s responses to comments received by stakeholders.  In the interim and due to the expansive nature of the final rule, this update provides a brief overview of the final rule intended to highlight certain of the modified and new Anti-Kickback safe harbors as well as other changes and clarification made by the OIG.  These regulations are effective January 19, 2021.  We welcome any questions to focus our analysis of the final rule. Future updates will take a deeper dive into the modified and new exceptions and other changes outlined in the final rule. To view the final rule in its entirety, please visit here, with the text of the amended regulations beginning on page 1006.

Technology and Framework

  • The OIG is finalizing, with modifications, the proposed terminology that describes Value Based Enterprises (VBEs) and VBE participants eligible to use the value-based safe harbors and the tiered framework of three value-based safe harbors, described below, that vary based on the level of risk assumed by the parties.

Safe Harbors for Value-Based Arrangements

  • The OIG finalized, with modifications, three new safe harbors for remuneration exchanged between or among participants in a value-based arrangement that fosters better coordinated and managed patient care.  The new safe harbors are: (1) care coordination arrangements to improve quality, health outcomes, and efficiency without requiring the parties to assume risk (42 C.F.R. § 1001.952(ee)), (2) value-based arrangements with substantial downside financial risk (§ 1001.952(ff)) and (3) value-based arrangements with full financial risk (§ 1001.952(gg)).
  • The new value-based safe harbors vary in a variety of ways.  Certain examples include that they vary by the types of remuneration protected, whether in-kind or in-kind and monetary, the entities eligible to utilize the safe harbors, the level of financial risk that must be assumed by the parties and the categories of safeguards that must be met.
  • Entities ineligible to use the new value-based safe harbors are: (a) pharmaceutical manufacturers, distributors, and wholesalers, (b) pharmacy benefit managers (commonly known as PBMs), (c) laboratory companies, (d) pharmacies that primarily compound drugs or primarily dispense compounded drugs, (e) manufacturers of devices or medical supplies, (f) entities or individuals that sell or rent durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) (other than a pharmacy or a physician, provider, or other entity that primarily furnishes services) and (g) medical device distributors and wholesalers. The OIG points out the care coordination arrangements safe harbor includes a separate pathway, assuming certain conditions are met, that would provide protection for digital technology arrangements involving manufacturers of devices or medical supplies and DMEPOS.

Patient Engagement and Support Safe Harbor

  • The OIG is finalizing, with modifications, a new safe harbor to be located at § 1001.952(hh) for patient engagement tools and support furnished by a participant in a value-based enterprise to a patient in a target patient population. Notably, this new safe harbor uses the same ineligible entities list as the value-based safe harbors, described above, and also includes an avenue for manufacturers of devices or medical supplies to provide digital health technology.

CMS-Sponsored Models Safe Harbor

  • The OIG finalized, with modifications, a new safe harbor to be located at § 1001.952(ii) for CMS-sponsored model arrangements and CMS-sponsored model patient incentives that would require OIG fraud and abuse waivers. This new safe harbor is intended to provide greater predictability model participants and uniformity across CMS models as well as limit the need for separate OIG fraud and abuse waivers for future CMS-sponsored models.

Cybersecurity Technology and Services Safe Harbor

  • The OIG is finalizing, with modifications, a new safe harbor to be located at § 1001.952(jj) for remuneration in the form of cybersecurity technology and services. This safe harbor is aimed to foster improvement of cybersecurity in the health care industry and is available to all types individuals and entities.  CMS established a similar exception to the Stark Law.

Electronic Health Records Safe Harbor

  • The OIG finalized its proposal, with modification, to amend the existing electronic health records items and services safe harbor located at § 1001.952(y). The finalized changes are intended to update and remove provisions regarding interoperability.  The OIG is removing the sunset provision as well as the prohibition on donation of equivalent technology.  The OIG further clarifies protections for cybersecurity technology and services included in an EHR arrangement.

Personal Services and Management Contracts and Outcomes-Based Payments

  • The OIG is finalizing is finalizing its proposal, without modification, to make changes to the existing personal services and management contracts safe harbor located § 1001.952(d)(1) to increase flexibility for part-time or sporadic arrangements and arrangements for which aggregate compensation is not known in advance.
  • The OIG is also finalizing, with modifications, new protection for outcomes-based payments to be located § 1001.952(d)(2). This new safe harbor for outcomes-based payments protects payments tied to achieving measurable outcomes that improve patient or population health or appropriately reduce payor costs. Entities that are ineligible for the value-based safe harbors are also ineligible for protection under this new safe harbor.


  • The OIG finalized its proposal, without modification, to amend the existing warranties safe harbor located at § 1001.952(g) by revising the definition of “warranty” and to provide protection for warranties for one or more items and related services.

Local Transportation

  • The OIG is finalizing, with modifications, to revise the existing local transportation furnished for beneficiaries safe harbor located at § 1001.952(bb) to expand mileage limits for rural areas (up to 75 miles) and to eliminate mileage limits for transportation to convey patients discharged from the hospital to their place of residence.  The OIG provide additional clarification that the safe harbor is available for transportation provided via ride-share arrangements.

ACO Beneficiary Incentives

  • Finally, the OIG is also codifying, without modification, the statutory exception to the definition of “remuneration” at section 1128B(b)(3)(K) of the Social Security Act related to ACO Beneficiary Incentive Programs for the Medicare Shared Savings Program to be located at § 1001.952(kk).