2016-698 Emergency Svc - North State Medical Transport - Application for Services Franchise by Ordinance

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3. Penalties Any person convicted of knowingly and willfully violating the Anti-kickback Statute shall be found guilty of a felony, and fined not more than $25,000 or imprisoned for not more than 5 years, or both, for each violation. Violators of the Anti-kickback Statute also are subject to exclusion from the federal health care programs upon a determination of a violation by the Secretary of Health and Human Services ("HHS"), regardless of whether a criminal conviction has been obtained. In addition, the Balanced Budget Act of 1997 grants the Secretary of HHS new authority to impose civil monetary penalties for each violation of the Anti-kickback Statute of: a. up to $50,000; and b. three times the amount of the remuneration in question. B. Safe Harbors and Exceptions 1 . Overview The Anti-kickback Statute includes limited statutory exceptions for certain fmancial arrangements, specifically an exception for employment arrangements and discounts. Additionally, the Department of Health and Human Services ("DHHS") has promulgated regulations,teliued "safe harbors," specifying certain payment practices that are excepted from the prohibitions of the Anti-kickback Statute. 42 C.F.R. § 1001.952, et. seq. However, the protection afforded by the safe harbor regulations is limited to very narrow circumstances. Paragraphs 2 through 7 below describe some of the statutory and regulatory safe harbors most pertinent to NSMT. 2. The Statutory Exception For Employment Arrangements and the Employment Safe Harbor The Anti-kickback Statute includes a statutory exception for "any amount paid by an employer to an employee (who has a bona fide employment relationship with such employer) for employment in the provision of covered items or services." Specifically, the safe harbors provide that the term "employee" has the same meaning as it does for purposes of 26 U.S.C. 3121(d) (2),which adopts the "usual common law rules." Nevertheless, DHHS also considers the purpose of the employment, the amount paid for the service, and whether• services were performed, in assessing the employment relationship, and might be expected to challenge "sham" employment arrangements despite the arguably blanket protection of this exception. 3. The Statutory Exception for Discounts and the Discount Safe Harbor The Anti-kickback Statute includes a statutory exception for "a discount or other reduction in price obtained by a provider of services or other entity under a federal healthcare program if the reduction in price is properly disclosed and appropriately reflected in the costs claimed or charges made by the provider or entity." The discount safe harbor regulation narrows the statutory exception through its restrictive definition of the word "discount". The discount safe harbor also prescribes specific disclosure standards for different categories of purchasers. 18