Husch Blackwell attorney Joe Geraci weighed in on recent guidance provided by HHS related to whether the federal anti-kickback statute applies to patients who purchase subsidized health insurance products on the new state or federal healthcare exchanges.  Specifically, the anti-kickback regulations apply to “federal healthcare programs” that are defined to include the following:

Any plan or program that provides health benefits, whether directly through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government …

(emphasis added)

Given this broad definition, many believed the HHS would classify subsidized healthcare exchange products as “federal healthcare programs.” Such a decision would, in effect, make the federal anti-kickback statute apply to commercial insurance because providers would have had no way of knowing whether a patient’s insurance from, for instance, Blue Cross or another commercial payor was purchased and subsidized through a PPACA exchange.

On Wednesday some clarity was provided. In a letter dated Oct. 30, 2013, to Rep. Jim McDermott, HHS Secretary Kathleen Sebelius stated that her department:

Does not consider qualified health plans (QHPs), other programs related to the federally facilitated marketplace, and other programs under Title I of the Affordable Care Act to be federal healthcare programs.

Consequently, subsidized health insurance products under PPACA are not “federal healthcare programs.” And since they are not federal healthcare programs, the anti-kickback statute will not apply to payments that providers receive from subsidized insurance products.

To read the full e-alert, and to learn about why a note of caution is in order, click here.