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Jon Dobson
February 28, 2017

AdvaMed Submits Proposal to OIG for New Safe Harbors to the Federal Anti-Kickback Statute for Value-Based Arrangements

WASHINGTON, D.C. – The Advanced Medical Technology Association (AdvaMed) today announced it has submitted proposals to the U.S. Department of Health & Human Services’ Office of Inspector General (OIG) for two new safe harbors to the federal anti-kickback statute that are specific to value-based health care arrangements. The submission responds to OIG’s Dec. 28, 2016, solicitation of proposals for new safe harbors.

The proposals advance the medical technology industry’s advocacy for modernization of U.S. anti-kickback statute and safe harbor regulations to facilitate the health care system’s shift away from traditional, volume-based (fee-for-service) models toward value-based payment and delivery. Developed by AdvaMed’s Legal Committee Working Group on Advancing Value-Based Health Care, the proposals are intended to allow for arrangements that optimize patients’ clinical outcomes and foster efficient and cost-effective delivery of care.

AdvaMed proposes that OIG establish two new safe harbors for value-based arrangements. The first would protect value-based pricing arrangements, and the second would protect value-based warranties. In each proposal, the arrangement would need to meet certain requirements in order to qualify for protection.

The proposed value-based pricing arrangements safe harbor would allow for price adjustments, and for services to be bundled with the product being sold or leased, subject to appropriate safeguards, where the arrangement is dependent upon the achievement of a measurable clinical and/or cost outcome.

The proposed value-based warranty safe harbor would allow manufacturers of products to make certain clinical and/or cost outcome assurances, and provide an appropriate remedy where such outcomes are not achieved.

The proposed safe harbors include/feature certain concepts from the existing discount and warranty safe harbors, including transparency and disclosure concepts, but expand the types of buyers and sellers that may be parties to value-based arrangements beyond what the existing safe harbors contemplate, to reflect current industry complexities.

As a possible alternative, AdvaMed proposes OIG modify the existing discount and warranty safe harbors to provide greater flexibility and clarity surrounding the ability of buyers and sellers to enter into value-based arrangements that promote optimal patient outcomes and cost efficiency.

AdvaMed’s proposals would provide greater clarity for manufacturers and buyers of their products by codifying a regulatory mechanism to develop a variety of value-based arrangements that do not present significant risk of increased costs, waste, fraud, or abuse to federal health care programs.

AdvaMed and its member companies look forward to continuing to partner with regulators and other stakeholders to promote value-based health care for the benefit of patients and the health care system.