by Jared Staheli
December 7th, 2020
The transformation of the American healthcare system from a primarily fee-for-service system to one based on value has been one of astonishing speed and scope, touching every aspect of health care. Changes of this scale inevitably have ripple effects that impact other laws and regulations, outdating them or highlighting inadequacies and necessitating fixes. Recent reforms announced by HHS to the Physician Self-Referral Law (also known as Stark Law) and Anti-Kickback Statute as part of their Regulatory Sprint to Coordinated Care, designed to eliminate barriers to providing this type of care, are prime examples of these knock-on effects.
Stark Law and the Anti-Kickback Statute are well-intentioned rules aimed at preventing fraud and abuse. Stark Law prohibits providers from referring patients to certain “designated health services” payable by Medicare or Medicaid if the provider or an immediate family member has a financial relationship to the entity. Anti-kickback rules are self-explanatory — physicians are prohibited from receiving inducements or compensation for referrals.
While fighting fraud and abuse are, of course, good and necessary, these regulations have stood in the way of care coordination — a particularly necessary service for many value-based arrangements which rely on diverse care teams — as providers fear running afoul of rules that can lead to steep fines and exclusion from participation in federal healthcare programs. Because providers can violate these rules and be subjected to penalties even without knowledge of the law or intent to break it, many have taken the rational approach of avoiding entering into business relationships which could lead to trouble.
In order to encourage the formation of beneficial partnerships, HHS released their Final Rule, Revisions to Safe Harbors Under the Anti-Kickback Statute, and Civil Monetary Penalty Rules Regarding Beneficiary Inducements, which revised existing and added new “safe harbors,” arrangements which would not be subject to fines or penalties under the existing rules. Since value and quality care are two vital goals for risk adjusted services, the revisions to these laws and detailed explanations and examples will considerably expand a provider's ability to meet them. These safe harbor changes include:
- “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 (§ 1001.952(ee));
- Value-Based Arrangements With Substantial Downside Financial Risk (§ 1001.952(ff)); and
- Value-Based Arrangements With Full Financial Risk (§ 1001.952(gg)).
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 (§ 1001.952(hh)) for certain tools and supports furnished to patients to improve quality, health outcomes, and efficiency.
- CMS-Sponsored Models. A new safe harbor (§ 1001.952(ii)) for certain remuneration provided in connection with a CMS-sponsored model (as defined in the Final Rule), 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 (§ 1001.952(jj)) 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 (§ 1001.952(y)) 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 (§ 1001.952(d)) to add flexibility for certain outcomes-based payments and part-time arrangements.
- Warranties. Modifications to the existing safe harbor for warranties (§ 1001.952(g)) 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 (§ 1001.952(bb)) 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 (§ 1001.952(kk)).
Subject to definitions and conditions set forth in the regulations in the Final Rule, 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 42 C.F.R. § 1003.110 interpreting and incorporating a new statutory exception to the prohibition on beneficiary inducements for “telehealth technologies” furnished to certain in-home dialysis patients.”
The HHS news release also lists some examples of arrangements made possible by this regulatory reform:
- “To improve patient transitions from one care delivery point to the next, a hospital may wish to provide physician offices with care coordinators that furnish individually tailored case management services for patients requiring post-acute care.
- A hospital may wish to provide support and to reward institutional post-acute providers for achieving outcome measures that effectively and efficiently coordinate care across care settings and reduce hospital readmissions. Such measures would be aligned with a patient’s successful recovery and return to living in the community.
- A primary care physician or other provider may wish to furnish a smart tablet that is capable of two-way, real-time interactive communication between the patient and his or her physician. The patient’s access to a smart tablet could facilitate communication through telehealth and the provision of in-home services.
- A health system furnishes cybersecurity technology to physician practices to reduce harm from cyber threats to all their systems.”
For more information, review the Fact Sheet here.