HHS, CMS Announce Changes to Stark Law and Anti-Kickback Statute

The U.S. Department of Health and Human Services Office of Inspector General and Centers for Medicare & Medicaid Services recently published long-awaited final rules that significantly reform regulations interpreting the federal Stark Law and Anti-Kickback Statute. The agencies have stated that the changes “aim to reduce regulatory barriers to care coordination and accelerate the transformation of the healthcare system into one that pays for value and promotes the delivery of coordinated care.â€

HHS’s final rule is titled “Revisions to the Safe Harbors Under the Anti-Kickback Statute and Civil Monetary Penalty Rules Regarding Beneficiary Inducements.” CMS issued the final rule “Modernizing and Clarifying the Physician Self-Referral Regulations.â€

In short, OIG’s final rule implements seven new safe harbors, modifies four ones, and codifies one new exception under the Beneficiary Inducements CMP. 

The final safe harbor regulations protect: Value-Based Arrangements. Three new safe harbors for certain remuneration exchanged between or among eligible participants in a value-based arrangement that fosters better coordinated and managed patient care:

• Care Coordination Arrangements to Improve Quality, Health Outcomes, and Efficiency
• Value-Based Arrangements With Substantial Downside Financial Risk
• Value-Based Arrangements With Full Financial Risk

These new safe harbors vary by the type of remuneration protected, level of financial risk assumed by the parties, and safeguards included as safe harbor conditions.

• Patient Engagement and Support – A new safe harbor for certain tools and supports furnished to patients to improve quality, health outcomes, and efficiency.
• CMS-Sponsored Models – A new safe harbor for certain remuneration provided in connection with a CMS-sponsored model, which should reduce the need for separate and distinct fraud and abuse waivers for new CMS-sponsored models.
• Cybersecurity Technology and Services – A new safe harbor for donations of cybersecurity technology and services
• Electronic Health Records Items and Services – Modifications to the existing safe harbor for electronic health records items and services to add protections for certain related cybersecurity technology, to update provisions regarding interoperability, and to remove the sunset date.
• Outcomes-Based Payments and Part-Time Arrangements – Modifications to the existing safe harbor for personal services and management contracts to add flexibility for certain outcomes-based payments and part-time arrangements.
• Warranties – Modifications to the existing safe harbor for warranties to revise the definition of “warranty†and provide protection for bundled warranties for one or more items and related services.
• Local Transportation – Modifications to the existing safe harbor for local transportation to expand and modify mileage limits for rural areas and for transportation for patients discharged from an inpatient facility or released from a hospital after being placed in observation status for at least 24 hours.
• Accountable Care Organization (ACO) Beneficiary Incentive Programs – Codification of the statutory exception to the definition of “remuneration†under the anti-kickback statute related to ACO Beneficiary Incentive Programs for the Medicare Shared Savings Program.

The final exception regulations under the Beneficiary Inducements CMP protect Telehealth for In-Home Dialysis.  An amendment to the definition of “remuneration†in the CMP rules at interpreting and incorporating a new statutory exception to the prohibition on beneficiary inducements for “telehealth technologies†furnished to certain in-home dialysis patients.

CMS final rule creates new, permanent exceptions to the Stark Law for value-based arrangements. The agency noted that the rule “unleashes innovation by permitting physicians and other healthcare providers to design and enter into value-based arrangements without fear that legitimate activities to coordinate and improve the quality of care for patients and lower costs would violate the Stark Law.â€

When the Stark Law was enacted more than 30 years ago, healthcare was paid for primarily on a fee-for-service basis. It prohibits a physician from making referrals for certain healthcare services payable by Medicare if that physician or an immediate family member has a financial relationship with the entity performing the service, with some exceptions.

Since that time, however, Medicare and other insurers have implemented value-based care, which pays based on the quality of patient care rather than the volume of services provided. CMS noted that in its current form, the Stark Law may prevent some arrangements that are designed to enhance care coordination, improve quality and reduce waste.

The final rule includes reforms to modernize the regulations that interpret the Stark Law while continuing to protect the Medicare program and patients from bad actors, according to CMS.

The Health Law Offices of Anthony C. Vitale can assist you with any questions you may have with these new rules and regulations. For more information give us a call at 05-358-4500 or send us an email to info@vitalehealthlaw.com and let’s discuss how we might be able to assist you.