Effective January 19, 2021, the Office of the Inspector General (OIG) at the Department of Health and Human Services (HHS) finalized changes to various Safe Harbors to the Antikickback Statute. Importantly, the changes alter the requirements of the Personal Services and Management Contracts Safe Harbors, which are applicable to the vast majority of contract agreements entered into by long term care providers.
Previously, to satisfy these Safe Harbors, any personal service or management contract where the vendor would do work on a sporadic, periodic, or part-time basis required the parties to set out in advance, the exact schedule of the services the vendor would provide, the precise length of each interval of service, and the charges applicable to each interval. The Safe Harbors also required the parties to specify in advance the total aggregate compensation that would be paid for the duration of the contract. For example, to satisfy the Personal Services Safe Harbor, a therapy agreement would have to (a) specify the specific intervals and times of service provided to facility residents, and (b) the contract would have to specify the total compensation that would be due to the therapy provider throughout the term of the agreement. These rules were not functional in the real-world environment and prevented most agreements from satisfying the applicable Safe Harbor. Importantly, though, the failure to satisfy a Safe Harbor did not automatically render the agreement in violation of the Anti-Kickback Statute.
The OIG’s revisions change these requirements, making it much easier for parties to enter into contracts that are protected by the Safe Harbors. Under the revisions, contracts where services may be sporadic, periodic, or part-time no longer require the parties to set out the exact schedule of the work, the charges for the intervals, and the precise length of the intervals. More importantly, the revised Safe Harbors no longer require the parties to set out in advance the total aggregate compensation paid pursuant to the agreement. Instead, an agreement now must only set out in advance the compensation methodology for how the vendor will be paid for the services they perform. This change will help many contractual arrangements to qualify for Safe Harbor protection, assuming the remaining requirements under the applicable Safe Harbor are satisfied.
If you have any questions regarding the changes to the Antikickback Statute and its Safe Harbors, or regarding a specific contractual arrangement for your organization, please feel free to contact David Marshall, Esq. (firstname.lastname@example.org) at 717-620-2424.