Proposed Changes to Stark and Anti-Kickback Laws

The U.S. Department of Health and Human Services Office of the Inspector General, in conjunction with the Centers for Medicare & Medicaid Services, has unveiled long-awaited proposals to revise safe harbor protections under the federal anti-kickback statute for certain coordinated care and associated value-based arrangements.

The proposed new regulations also would add protections under the anti-kickback statute and civil monetary penalty (CMP) law that prohibit inducements offered to patients for certain patient engagement and support arrangements to improve quality of care, health outcomes, and efficiency of care delivery that squarely meet all safe harbor conditions.

HHS says the proposed rules are part of its “Regulatory Sprint to Coordinated Care,” which is designed to promote value-based care by easing compliance burdens, while at the same time maintaining safeguards.

The agency noted that since the creation of the federal anti-kickback statute in 1972 there have been significant changes in the delivery of, and payment for, healthcare items and services within the Medicare and Medicaid programs and for non-federal payors and patients.

The Stark Law, which was passed in 1989, prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership, investment, or compensation), unless an exception applies.”

When these laws were passed, the healthcare system relied heavily on a fee-for-service model, but over the years that has changed as we move toward value-based care.

Providers have long complained that they have been discouraged from entering into innovative arrangements that would improve quality of care and better health outcomes, while at the same time lower cost ,because such arrangements might be in violation of self-referral or anti-kickback laws.

The proposed rule would add a new safe harbor for donations of cybersecurity technology and amend the existing safe harbors for electronic health records (EHR) arrangements, warranties, local transportation, and personal services and management contracts.

It would also add a new safe harbor, and a new CMP exception, for certain telehealth technologies offered to patients receiving in-home dialysis.

HHS provided the following examples of how these safe harbors might work:

  • A specialty physician practice could share data analytics services with a primary care physician practice as a way to coordinate care and better manage the care of shared patients.
  • Hospitals and physicians could work together in new ways to coordinate care for patients being discharged from the hospital. For example, the hospital might provide the discharged patients’ physicians with care coordinators to ensure patients receive appropriate follow up care, data analytics systems to help physicians ensure that their patients are achieving better health outcomes, and remote monitoring technology to alert physicians or caregivers when a patient needs healthcare intervention to prevent unnecessary ER visits and readmissions.
  • A physician practice could provide smart pillboxes to patients for free to help them remember to take their medications. The practice also could provide a home health aide to teach the patient and the patient’s caregiver how to use the pillbox. The pillbox could automatically alert the physician practice and caregiver when a patient misses a dose so they could follow up promptly with the patient.
  • A local hospital could improve its cybersecurity and that of nearby providers it works with frequently by donating cybersecurity software to each physician who refers patients to its hospital. The software would help ensure that hackers cannot attack the physician’s computers. This would help prevent hackers from spreading the attack to other physicians and the hospital.
  • To improve health outcomes for patients with end-stage kidney disease, a nephrologist, dialysis facility, or other provider could furnish the patients with technology that is capable of monitoring the patient’s health via telemedicine. In addition, the facility could equip the physicians with data analytics software to help them monitor patients’ health outcomes.

The OIG said the news rules were created with industry input and with a focus on striking the right balance between flexibility for beneficial innovation and safeguards to protect patients and federal healthcare programs.

HHS will accept comments about the proposals up to 75 days after publication in the registry.

The Health Law Offices of Anthony C. Vitale can assist clients in understanding what arrangements are permissible under current law and to provide them with guidance as laws are updated. For more information, give us a call at 305-358-4500, or send an email to and let’s discuss how we might be able to assist you.

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The Health Law Offices of Anthony C. Vitale

The Health Law Offices of Anthony C. Vitale