The Department of Heath and Human Services' ("HHS") Office of Inspector General ("OIG") published a final rule in the Federal Register on November 19, 1999, that establishes eight new regulatory exceptions or "safe harbors," and clarifies six of the existing safe harbors to the federal Anti-kickback Statute (the "Statute"). This Memorandum focuses on the 1999 final rule's clarification of the regulatory discount safe harbor. We will address the final rule in its entirety in a separate, subsequent Memorandum.
The 1999 discount safe harbor "clarification" creates a third category of party to a transaction. Previously, the discount safe harbor recognized only buyers and sellers. The 1999 final rule restructures the discount safe harbor to provide for three categories of parties to a discount transaction, namely: buyer; seller; and "offeror."
Essentially, the final rule:
In clarifying the regulatory safe harbor for discounts in its new final rule, the OIG noted that "the regulatory safe harbor both incorporates and enlarges upon the statutory exception," and only particular discounts and price reduction schemes are protected from sanctions under the statutory exception.
Dickstein Shapiro Morin & Oshinsky, LLP