Posted On: April 19, 2023

Safe Harbor Act: What Are Anti-kickback Laws in Healthcare?

You became a healthcare professional to spend your life helping people. Unfortunately, the job also comes with a ton of regulations, legal jargon, and fine print you need to read and understand in order to do your job.

Safe harbor regulations are just one of the many things you need to know. Keep reading to find out what are safe harbor laws in healthcare, and how they affect you.

What Are Safe Harbor Laws in Healthcare?

In most cases, safe harbor laws in healthcare refer to the regulations that exempt certain payments and business practices from being considered illegal kickbacks or bribes. In other words, they're exceptions to the Anti-Kickback Statute (AKS).

However, the phrase "safe harbor for nurses" usually refers to a different kind of law altogether. See the appropriate section below.

What Is the Anti-Kickback Statute?

The Anti-Kickback Statute was introduced to reduce Medicare and Medicaid fraud.

Say a doctor writes a referral for a product or service so that their patient can benefit from it and charge it to a federally funded healthcare program. You'd hope that the doctor writes the referral because they truly believe that the medication or treatment is in the best interest of their patient.

Unfortunately, this isn't always the case. Sometimes the doctor is getting something out of it, like a payment or gift for each person they refer. The concern is that doctors in this situation won't recommend the best course of treatment for the patient and instead go with the most lucrative course of treatment for them.

And that's considered a very big problem when the government's footing the bill.

These situations are what the Anti-Kickback Statute is designed to prevent. The law doesn't just prohibit direct payments that incentivize referrals, but the exchange of "anything of value." That could include anything from free tickets to a sporting event, consulting/speaking arrangements, compensation that goes above fair market value, and other sneaky workarounds meant to dodge the law.

What Is the Safe Harbor Act and Why Does It Exist?

After the Anti-Kickback Statute was instituted, there were concerns that certain innocuous commercial arrangements could be prohibited under the Anti-Kickback Statute.

Basically, companies and healthcare professionals were worried that payments made for legitimate reasons could be misconstrued as a kickback, and the liability of potential prosecution made them nervous. They wanted to know the exact conditions they needed to meet for a payment to be considered above board.

The resulting regulations are sometimes referred to as the Safe Harbor Act, but no such law was passed by Congress. Instead, safe harbor "laws" in healthcare are actually regulations created by the Department of Health and Human Services (HHS)'s Office of the Inspector General (OIG). The HHS's OIG is responsible for enforcing the Anti-Kickback Statute and the safe harbors from it.

What Are the Anti-Kickback Statute's Safe Harbors?

There are 28 different payment practices and business arrangements that are exempt from AKS liability under the safe harbor regulations.

Some of the most common safe harbors include:

  • Investment interests in publicly-held companies
  • Commercially-reasonable discounts
  • Bona-fide employment relationships
  • Lease/rental of office space or equipment

Each safe harbor has very specific conditions that must all be met to qualify for the exception. This is to prevent people from getting creative in disguising kickbacks as something else. If you don't meet all of the safe harbor provisions, you could still be criminally or civilly liable under the Anti-Kickback Statute.

For most safe harbors, one of the provisions is proper disclosure. In other words, there's paperwork or documentation involved. For the discount safe harbor, for example, you'd need invoices and a record of your negotiations.

Other common provisions relate to making sure that the healthcare professional in a position to make a referral doesn't get a deeper discount or better deal than what would be available to someone else. For example, to qualify for the small investor safe harbor, a referring doctor can't buy at a lower share price than a member of the general public.

What Is Safe Harbor in Nursing?

Although nurses need to be aware of the Anti-Kickback Statute and its safe harbors, the phrase "safe harbor for nurses" usually means something completely unrelated.

Recently, states like New Mexico and Texas have passed safe harbor laws for nurses. These laws allow licensed nurses to reject certain assignments without fear of retaliation from their employers.

These laws are designed to help nurses protect their license to practice when it's jeopardized by an employer's assignment or orders.

Details may vary, but generally, nurses can invoke the safe harbor law when accepting the assignment or order wouldn't be in the best interest of their patient. This might mean that the nurse doesn't have the skills required to do the job, or it could be that they're questioning the medical soundness of the order.

Invoking safe harbor typically involves a paper trail, but Texas has made it possible to invoke "oral safe harbor" during an emergency to prevent a delay of care (with the paperwork coming later).

Once safe harbor laws in nursing are properly invoked, the nurse is protected against retaliation like suspension, termination, discipline, and licensure sanctions.

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