HHS floats Stark/anti-kickback revisions to support value-based care


Federal health officials are seeking to update provisions of the Stark Physician Self-Referral law and the federal Anti-Kickback Statute in an effort to encourage more physicians to enter into value-based care arrangements.

The long-awaited reforms would create permanent exemptions and safe harbors to protect doctors participating in legitimate value-based arrangements. If finalized, the proposals also would offer flexibility for innovation and improved care coordination, while easing the compliance burden for health care professionals and maintaining safeguards against actual fraud and abuse, according to the U.S. Department of Health & Human Services.

The proposals acknowledge that the Stark Law has been an unintentional roadblock to value-based programs in part because it circumscribed parties’ exchanges of rewards for good behavior, said Donna K. Thiel, a Washington-based health law attorney.

“This should be helpful to doctors in that it removes some of the risk in such arrangements under the existing law,” she said in an interview. “If finalized, the new regulations will alleviate some roadblocks created by the Stark Law with respect to hospital-physician and other arrangements designed to enhance care coordination, improve quality, and reduce waste. Likewise, the changes to the [Anti-Kickback Statute] and Beneficiary Inducement laws loosen the reins on compensation arrangements that might be technical violations of those laws where the arrangement fosters [value-based payments] or efficiency, transparency, or innovation in the provision of health care.”

“These proposed rules would be a historic reform of how healthcare is regulated in America,” HHS Deputy Secretary Eric Hargan said in a statement. “They are part of a much broader effort to update, reform, and cut back our regulations to allow innovation toward a more affordable, higher quality, value-based health care system, while maintaining the important protections patients need.”

The two proposed measures – one rule by the Centers for Medicare and Medicaid Services and the other rule by the Office of Inspector General – include safe harbors for certain remuneration exchanged among participants in a value-based arrangement that fosters better coordinated and managed patient care. This includes care arrangements that improve quality, health outcomes, and efficiency, value-based arrangements with substantial downside financial risk, and value-based arrangements with full financial risk.

In addition, the proposals would protect certain tools and supports shared or delivered under patient engagement and support arrangements to improve quality, health outcomes, and efficiency. For example, a specialty physician practice could share data analytics services with a primary care physician practice in an effort to coordinate care and better manage shared patients, according to the HHS.

If finalized, the changes would modify existing safe harbor for personal services and management contracts to add flexibility with respect to outcomes-based payments and part-time arrangements, according to a fact sheet by the OIG. The rule would also modify existing safe harbors for local transportation to expand and modify mileage limits for rural areas and for transportation for discharged patients.

The proposals include guidance on several requirements that must be met for physicians and health care providers to comply with the Stark Law. For example, compensation provided to a doctor by another health care provider generally must be at fair-market value. As part of the proposals, the HHS offers guidance on how to determine if compensation meets this requirement and provides clarity on a range of other technical compliance requirements.

If the rules are approved, more physicians may be encouraged to become part of value-based arrangements, according to Anjali N.C. Downs, a health law attorney based in Washington.

Anjali N.C. Downs, a health law attorney based in Washington

Anjali N.C. Downs

“As stakeholders have long known, physicians are key components to achieving value-based health care delivery and payment systems,” Ms. Downs said in an interview. “The proposed rules remove regulatory barriers that chill physician’s willingness and ability to participate in or even consider participating in integrated care delivery models, alternative payment models, and incentive based arrangements based on outcomes and reductions in cost.”

However, Ms. Thiel noted the proposed rules do not scale back the affected laws as comprehensively as some stakeholders hoped.

“Some would like to see the Stark law repealed completely, opining that the Stark Law has become too complex, creating obstacles in the transition from the fee-for-service model,” Ms. Thiel said. “Because Stark is a strict liability law, meaning no proof of specific intent to violate is required, providers and doctors can violate Stark even when there is no corrupt intent involved. This new regulation purports to fix some of those issues, but others will remain. Some in the industry believe full repeal is necessary to allow the health industry to move forward with pay-for-performance initiatives.”

The agency is also proposing a safe harbor for donations of cybersecurity technology and services between aligned providers in both the fee-for-service and the value-based settings. For example, a local hospital looking to improve its cybersecurity and that of nearby providers could donate cybersecurity software to each physician that refers patients to its hospital, according to the HHS. In addition, the proposals would add protections for certain cybersecurity technology included as part of an electronic health records (EHR) arrangement.

Physician organizations expressed cautious optimism about the proposed changes.

“While the [American Medical Association] is assessing the full scope of today’s proposals, we are pleased to see that the administration has acknowledged a need for policy revisions in response to potential barriers that impede the delivery of patient-centric care,” AMA President Patrice A. Harris, MD, said in a statement. “Currently, the Stark Law and Anti-Kickback Statute can have a negative impact on the ability of physicians to assist with coordination because they inhibit collaborative partnerships, care continuity, and the engagement of patients in their care. These obstacles can hinder the health care system’s movement to value-based care.”

The proposed rules have been submitted to the Federal Registry and are not yet published. The HHS will accept mail and electronic comments about the proposals up to 75 days after publication in the registry.

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