OIG's Warranty Safe Harbor Opinion And Value-Based Care

By Thomas Bulleit, David Peloquin, Elizabeth McCann and Nicholas Wallace (September 14, 2017, 11:47 AM EDT) -- In a new advisory opinion, the U.S. Department of Health and Human Services Office of Inspector General clarified the scope of the Anti-Kickback Statute warranty safe harbor.[1] In brief, the opinion recognizes that the warranty safe harbor can provide protection for a warranty offered for "many reasons, including failure to meet quality standards or failing to achieve patient clinical results specified as targets at the time of sale."[2] This confirms the long-standing view of many in the drug and medical device industry that the warranty safe harbor applies more broadly than the traditional product defect settings described in previous OIG guidance. This broadening of OIG's previous guidance on the warranty safe harbor may facilitate many of the outcomes-based risk-sharing arrangements that drug and device sellers have been contemplating (and pursuing) as part of the movement toward value-based health care....

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