Special report on reimbursement. Final Medicare fraud and abuse safe harbors are published

There has been great concern in the health care industry that business arrangements that do not comply with the Safe Harbors will automatically be deemed illegal. HHS has confirmed that this is not so; the commentary to the Regulations expressly states that "The failure of a particular business arrangement to comply with these provisions does not determine whether or not the arrangement violates the statute because...this regulation does not make conduct illegal. Any conduct that could be construed to be illegal after the promulgation of this rule would have been illegal at any time since the current law was enacted in 1977....This regulation is intended to provide a formula for avoiding risk in the future." 56 Fed. Reg. at 35955. In the final analysis, the majority of transactions will fall outside the Safe Harbors and thus will continue to be judged by the standards established by the Medicare antifraud statute enacted 14 years ago. Under these standards, as HHS states, "the degree of the risk [in any particular transaction] depends on an evaluation of the many factors which are part of the decision-making process regarding case selection for investigation and prosecution." Id. at 35954. Providers that are mindful of these criteria should therefore still be able to accomplish, with relative safety, transactions that do not qualify for Safe Harbor protection.