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    Comparison Chart of Anti-Kickback Safe Harbors and Stark Exceptions -- Obstetrical Malpractice Insurance Subsidies

    Obstetrical Malpractice Insurance Subsidies – Current as of March 2021

    Stark
    Stark exception to the referral prohibition related to compensation arrangements for obstetrical malpractice insurance subsidiaries 42 CFR 411.357(r)

    Anti-Kickback
    Safe harbor for obstetrical malpractice insurance subsidies 42 CFR 1001.952(o)

    Payments to a referring physician that meet all of the conditions in the anti-kickback safe harbor for obstetrical malpractice insurance subsidiaries; OR all of the following:

    The payment is made by a hospital or other entity to another entity that is providing malpractice insurance (including a self-funded entity), where such payment is used to pay for some or all of the costs of malpractice insurance premiums for a practitioner (including a certified nurse- midwife) who engages in obstetrical practice as a routine part of his or her medical practice in a primary care health professional shortage area ("HPSA").

    The payment is from a hospital, federally qualified health center, or rural health clinic that is used to pay for some or all of the costs of malpractice insurance premiums for a physician who engages in obstetrical practice as a routine part of his or her medical practice.

    The payment is made in accordance with a written agreement between the entity paying the premiums and the practitioner, which sets out the payments to be made by the entity, and the terms under which the payments are to be provided.

    The physician’s medical practice is located in a rural area, a primary care HPSA, or an area with demonstrated need for the physician’s obstetrical services as determined by the Secretary in an advisory opinion; or at least 75 percent of the physician’s obstetrical patients reside in a medically underserved area or are members of a medically underserved population.

    The practitioner must certify that for the initial coverage period (not to exceed one year) the practitioner has a reasonable basis for believing that at least 75 percent of the practitioner's obstetrical patients treated under the coverage of the malpractice insurance will either: a) reside in a HPSA or medically underserved area ('MUA"); or b) be part of a medically underserved population ("MUP"). Thereafter, for each additional coverage period (not to exceed one year), at least 75 percent of the practitioner's obstetrical patients treated under the prior coverage period (not to exceed one year) must have: a) resided in a HPSA or MUA; or b) been part of a MUP.

    The arrangement is set out in writing, is signed by the physician and the hospital, federally qualified health center, or rural health clinic providing the payment, and specifies the payments to be made by the hospital, federally qualified health center, or rural health clinic and the terms under which the payments are to be provided.

    There is no requirement that the practitioner make referrals to, or otherwise generate business for, the entity as a condition for receiving the benefits.

    The arrangement is not conditioned on the physician’s referral of patients to the hospital, federally qualified health center, or rural health clinic providing the payment

    The practitioner is not restricted from establishing staff privileges at, referring any service to, or otherwise generating any business for any other entity of his or her choosing.

    The hospital, federally qualified health center, or rural health clinic does not determine the amount of the payment in any manner that takes into account the volume or value of referrals by the physician or any other business generated between the parties.

    The amount of payment may not vary based on the volume or value of any previous or expected referrals to or business otherwise generated for the entity by the practitioner for which payment may be made in whole or in part under Medicare, Medicaid or any other Federal health care program.

    The physician is allowed to establish staff privileges at any hospital(s), federally qualified health center(s), or rural health clinic(s) and to refer business to any other entities (except as referrals may be restricted under an employment arrangement or services arrangement).

    The practitioner must treat obstetrical patients who receive medical benefits or assistance under any Federal health care program in a nondiscriminatory manner.

    The payment is made to a person or organization (other than the physician) that is providing malpractice insurance (including a self-funded organization).

    The insurance is a bona fide malpractice insurance policy or program, and the premium, if any, is calculated based on a bona fide assessment of the liability risk covered under the insurance.

    The physician treats obstetrical patients who receive medical benefits or assistance under any Federal health care program in a nondiscriminatory manner. 

    Costs of malpractice insurance premiums means: a) for practitioners who engage in obstetrical practice full-time, any costs attributable to malpractice insurance; or b) for practitioners who engage in obstetrical practice on a part- time or sporadic basis, the costs: attributable exclusively to the obstetrical portion of the practitioner's malpractice insurance and related exclusively to obstetrical services provided in a primary care HPSA.

    The insurance is a bona fide malpractice insurance policy or program, and the premium, if any, is calculated based on a bona fide assessment of the liability risk covered under the insurance.  
    For each coverage period (not to exceed 1 year), at least 75 percent of the physician’s obstetrical patients treated under the coverage of the obstetrical malpractice insurance during the prior period (not to exceed 1 year)-- (1) Resided in a rural area, HPSA, medically underserved area, or an area with a demonstrated need for the physician’s obstetrical services as determined by the Secretary in an advisory opinion issued in accordance with section 1877(g)(6) of the Act; or (2) Were part of a medically underserved population. For the initial coverage period (not to exceed 1 year), these requirements will be satisfied if the physician certifies that he or she has a reasonable expectation that at least 75 percent of the physician's obstetrical patients treated under the coverage of the malpractice insurance will— (1) Reside in a rural area, HPSA, medically underserved area, or an area with a demonstrated need for the physician’s obstetrical services as determined by the Secretary in an advisory opinion; or (2) Be part of a medically underserved population.

     

    The costs of malpractice insurance premiums means: (i) For physicians who engage in obstetrical practice on a full-time basis, any costs attributable to malpractice insurance; or (ii) For physicians who engage in obstetrical practice on a part-time or sporadic basis, the costs attributable exclusively to the obstetrical portion of the physician's malpractice insurance, and related exclusively to obstetrical services provided-- (A) In a rural area, primary care HPSA, or an area with demonstrated need for the physician’s obstetrical services, as determined by the Secretary in an advisory opinion; or (B) In any area, provided that at least 75 percent of the physician's obstetrical patients treated in the coverage period (not to exceed 1 year) resided in a rural area or medically underserved area or were part of a medically underserved population.