§216. ADDITIONAL EXCEPTION TO ANTI-KICKBACK PENALTIES FOR RISK-SHARING ARRANGEMENTS. (42 USC 1320a-7b(b)(3))

Health Insurance Portability and Accountability Act of 1996

TITLE II—PREVENTING HEALTH CARE FRAUD AND ABUSE; ADMINISTRATIVE SIMPLIFICATION

(a) In General.—Section 1128B(b)(3) is amended—

(a)(1) by striking "and" at the end of subparagraph (D);

(a)(2) by striking the period at the end of subparagraph (E) and inserting ‘‘; and’’; and

(a)(3) by adding at the end the following new subparagraph:

‘‘(F) any remuneration between an organization and an individual or entity providing items or services, or a combination thereof, pursuant to a written agreement between the organization and the individual or entity if the organization is an eligible organization under section 1876 or if the written agreement, through a risk-sharing arrangement, places the individual or entity at substantial financial risk for the cost or utilization of the items or services, or a combination thereof, which the individual or entity is obligated to provide.’’.

(b) Negotiated Rulemaking for Risk-Sharing Exception. (42 USC 1320a-7b) —

(b)(1) Establishment.—

(b)(1)(A) In general.—The Secretary of Health and Human Services (in this subsection referred to as the ‘‘Secretary’’) shall establish, on an expedited basis and using a negotiated rulemaking process under subchapter 3 of chapter 5 of title 5, United States Code, standards relating to the exception for risk-sharing arrangements to the anti-kickback penalties described in section 1128B(b)(3)(F) of the Social Security Act, as added by subsection (a).

(b)(1)(B) Factors to consider.—In establishing standards relating to the exception for risk-sharing arrangements to the anti-kickback penalties under subparagraph (A), the Secretary—

(b)(1)(B)(i) shall consult with the Attorney General and representatives of the hospital, physician, other health practitioner, and health plan communities, and other interested parties; and

(b)(1)(B)(ii) shall take into account—

(b)(1)(B)(ii)(I) the level of risk appropriate to the size and type of arrangement;

(b)(1)(B)(ii)(II) the frequency of assessment and distribution of incentives;

(b)(1)(B)(ii)(III) the level of capital contribution; and

(b)(1)(B)(ii)(IV) the extent to which the risk-sharing arrangement provides incentives to control the cost and quality of health care services.

(b)(2) Publication of notice.—In carrying out the rule-making process under this subsection, the Secretary shall publish the notice provided for under section 564(a) of title 5, United States Code, by not later than 45 days after the date of the enactment of this Act.

(b)(3) Target date for publication of rule.—As part of the notice under paragraph (2), and for purposes of this subsection, the ‘‘target date for publication’’ (referred to in section 564(a)(5) of such title) shall be January 1, 1997.

(b)(4) Abbreviated period for submission of comments.— In applying section 564(c) of such title under this subsection, ‘‘15 days’’ shall be substituted for ‘‘30 days’’.

(b)(5) Appointment of negotiated rulemaking committee and facilitator.—The Secretary shall provide for—

(b)(5)(A) the appointment of a negotiated rulemaking committee under section 565(a) of such title by not later than 30 days after the end of the comment period provided for under section 564(c) of such title (as shortened under paragraph (4)), and

(b)(5)(B) the nomination of a facilitator under section 566(c) of such title by not later than 10 days after the date of appointment of the committee.

(b)(6) Preliminary committee report.—The negotiated rule-making committee appointed under paragraph (5) shall report to the Secretary, by not later than October 1, 1996, regarding the committee's progress on achieving a consensus with regard to the rulemaking proceeding and whether such consensus is likely to occur before one month before the target date for publication of the rule. If the committee reports that the committee has failed to make significant progress toward such consensus or is unlikely to reach such consensus by the target date, the Secretary may terminate such process and provide for the publication of a rule under this subsection through such other methods as the Secretary may provide.

(b)(7) Final committee report.—If the committee is not terminated under paragraph (6), the rulemaking committee shall submit a report containing a proposed rule by not later than one month before the target publication date.

(b)(8) Interim, final effect.—The Secretary shall publish a rule under this subsection in the Federal Register by not later than the target publication date. Such rule shall be effective and final immediately on an interim basis, but is subject to change and revision after public notice and opportunity for a period (of not less than 60 days) for public comment. In connection with such rule, the Secretary shall specify the process for the timely review and approval of applications of entities to be certified as provider-sponsored organizations pursuant to such rules and consistent with this subsection.

(b)(9) Publication of rule after public comment.—The Secretary shall provide for consideration of such comments and republication of such rule by not later than 1 year after the target publication date.

(c) Effective Date.—The amendments made by subsection (a) shall apply to written agreements entered into on or after January 1, 1997, without regard to whether regulations have been issued to implement such amendments.