Narrow harbors. Few joint ventures will find haven in the investment-interest safe harbor.

Investors and potential investors had hoped for meaningful guidance from the safe harbor regulations on appropriate structures for healthcare joint ventures. Unfortunately, the narrowly drawn final investment-interest safe harbor offers relatively little meaningful guidance or protection for the vast majority of such ventures. The Illegal Remuneration Statute (also known as the fraud and abuse statute) was first enacted in 1972 to prohibit members of the healthcare community from exchanging patient referrals for any kind of remuneration. In 1987 Congress instructed the secretary of Health and Human Services to create "safe harbors" for legitimate payment practices that, although they may violate the statute's strict prohibition, will be protected from prosecution. The investment-interest safe harbor has garnered the most attention. It provides two safe harbors, one for investments in large entities and one for investments in small entities. Both safe harbors contain onerous threshold requirements and other restrictions that diminish the usefulness of the safe harbor for all but a very few ventures. In addition, the Office of the Inspector General has created other obstacles to forming and preserving "safe" healthcare business ventures, including a refusal to "grandfather" or create a "safe harbor restructuring period" for existing business arrangements. Because most existing or planned joint ventures do not qualify for the investment-interest safe harbor, investors are forced to make their business decisions on the basis of the same factors used before publication of the safe harbor regulations. Such analysis will continue to focus on factors that demonstrate organizations' intent in making payments to investors as a return on investments.