Health Care Fraud

By Lundqvist, Hanna; Birbach, Naomi et al. | American Criminal Law Review, Spring 2012 | Go to article overview

Health Care Fraud

Lundqvist, Hanna, Birbach, Naomi, Carney, Tiffiney, Heyd, Brittany, American Criminal Law Review

viii. Arrangements Between Providers and Health Plans

Providers who contract with health plans to provide services for reduced fees may be protected by a safe harbor coveting price reductions offered to health plans. (197) The requirements vary depending on the health plan and the arrangement made with the government. If the plan is an HMO, CMP, or PHP that has entered a contract with CMS or a state agency, it will be protected if it does not claim payment from HHS or a state agency without prior approval or otherwise attempt to shift the burden of the agreement onto Medicare or a state health program. (198) Plans that are not HMOs, CMPs, or PHPs have different requirements. (199)

Payments between eligible managed care organizations ("MCO") (200) and contractors, and payments between contractors and sub-contractors, are protected under the safe harbor for price reductions offered to eligible MCOs if a signed, written agreement between the parties for at least one year specifies covered items and services. (201) Neither party to such an agreement may seek to give or receive payment in exchange for the provision or acceptance of business outside of the scope of the agreement if a federal health care program may reimburse the business on a fee-for-service or cost basis. (202) The financial burden of such an agreement may not be shifted to a federal health care program. (203)

A separate safe harbor protects arrangements between MCOs and contractors and subcontractors if the contracting entities bear some of the risk of patient care. (204) Payments between qualified managed care plans (205) and first-tier contractors are protected if a written signed agreement between the parties: (i) covers at least a year; (ii) specifies the items and services covered by the agreement; (iii) requires participation in a quality assurance program; and (iv) specifies how fees will be determined and assessed. (206) If the first-tier contractor has an investment interest in the health plan, the interest must fulfill the requirements of the investment interest safe harbor. (207)

ix. Relationships Between Providers and Suppliers

Several safe harbors guide the relationships between providers and suppliers. Regulations governing warranties, discounts, and group purchasing organizations ("GPOP") outline the steps necessary to avoid anti-kickback inquiry into supplier arrangements.

Suppliers or manufacturers of medical equipment and other supplies may offer warranties to purchasing health care providers or beneficiaries that either guarantee replacement of a supplier or manufacturer's own product or of another entity's defective product. (208) These warranties become abusive when a provider receives an item for a reduced price because of a warranty, but then, for reimbursement purposes, reports the purchase of the item as though the item were new. (209) Another abusive warranty arrangement occurs when a supplier offers to honor another manufacturer's warranties, but instead of repairing the item, replaces it with his own brand, and then the purchaser bills Medicare for the replacement value. (210) Anti-kickback provisions punish such arrangements unless they fall within the protection of the warranty safe harbor. (211) The safe harbor regulations impose requirements on both the seller and the buyer. The seller must (i) accurately report any price reduction that results from the warranty on the invoice that it presents to the buyer; (ii) clearly report the existence of a warranty on the invoice and then provide supplemental documentation to the buyer once the price reduction is known, if the amount of the reduction is not known at the time of sale; (iii) not pay for anything under the warranty other than the cost of the item itself; and (iv) inform the buyer of its obligations under this provision. (212) The buyer must (i) accurately report any price reduction that it received on an item to HHS or a state agency on the applicable cost reporting mechanism; and (ii) upon request, provide HHS or a state agency with the invoice and any supplemental documentation from the manufacturer for products under warranty. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)


1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

Cited article

Health Care Fraud


Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.