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

October 2019 ~

On October 9, the Department of Health and Human Services (HHS) announced proposed changes that seek to modernize and clarify the regulations that interpret the Physician Self-Referral Law (the Stark Law) and the Federal Anti-Kickback Statute.

The proposed rule has been designed to provide greater certainty for healthcare providers participating in value-based arrangements and providing coordinated care for patients. The proposed changes are intended to ease the compliance burden for healthcare providers across the industry while maintaining strong safeguards to protect patients and programs from fraud and abuse.

Until now, the Stark Law has not been significantly updated since its enactment in 1989. According to the CMS fact sheet, the proposed rule supports the agency’s “Patients over Paperwork” initiative by reducing unnecessary regulatory burden on physicians and other healthcare providers while reinforcing the Stark Law’s goal of protecting patients from unnecessary services and being steered to less convenient, lower quality, or more expensive services because of a physician’s financial self-interest.

The proposed rule includes a comprehensive package of proposed reforms to modernize the regulations that interpret the Stark Law while continuing to protect the Medicare program and patients from bad actors. Under this proposed rule, for the first time, the regulations would support the necessary evolution of the American healthcare delivery and payment system. CMS states that through the Patients over Paperwork initiative, the proposed rule opens additional avenues for physicians and other healthcare providers to coordinate the care of the patients they serve. Which will allow providers across different healthcare settings to work together to ensure patients receive the highest quality of care.

The agency also notes in the fact sheet, that as part of the Regulatory Sprint to Coordinated Care, CMS worked closely with the HHS Office of Inspector General (OIG) to develop proposals to advance the transition to a value-based healthcare delivery and payment system that improves the coordination of care among physicians and other healthcare providers in both the Federal and commercial sectors.

Major provisions of the proposed rule include:

Exceptions for Value-based Arrangements

The proposed rule would create new, permanent exceptions to the Stark Law for value-based arrangements. The rule is intended to “unleash innovation” by allowing 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 be in violation of the Stark Law. CMS notes that these exceptions would apply regardless of whether the arrangement relates to care furnished to people with Medicare or other patients.

Additionally, recognizing that incentives are different in a healthcare system that pays for the value, rather than the volume, of services provided, CMS says the new value-based exceptions include a “carefully woven fabric” of safeguards to ensure that the Stark Law continues to provide appropriate protection against overutilization and other harms.

New Guidance and Clarifications 

The proposed rule would provide additional guidance on several key requirements that must often be met in order for physicians and healthcare providers to comply with the Stark Law.

In a situation where compensation is provided to a physician by another healthcare provider, it generally must be at fair market value. The proposed rule would provide guidance on how to determine if compensation meets this requirement.

The proposed rule also provides clarity and guidance on a wide range of other technical compliance requirements intended to reduce administrative burden that drives up costs.

Other New Exceptions
The proposed exceptions would also provide new flexibility for certain arrangements, such as donations of certain cybersecurity technology that safeguard the integrity of the healthcare ecosystem, regardless of whether the parties operate in a fee-for-service or value-based payment system.

CMS is seeking comments about the role of price transparency in the context of the Stark Law and whether to require cost-of-care information at the point of a referral for an item or service. All comments on the proposed rules must be submitted by December 31, 2019.



Source(s): U.S. Department of Health & Human Services; Lexology; Healthcare Finance News; McGuire Woods Consulting; CMS Fact Sheet;