On November 20, 2020, the Centers for Medicare & Medicaid Services (CMS) released the final rules amending the Stark Law and Anti-Kickback Statutes (AKS). Efforts to clarify these outdated laws began in 2018, with the goal to reduce regulatory obstacles for care coordination, following a general move toward value-based care. The Stark Law and AKS were initially created for a fee-for-service healthcare system, where there are financial incentives to provide more services to patients. However, the current U.S. healthcare system is shifting towards rewarding providers for keeping patients healthy and providing quality care, focusing on the value a payment has to a patient rather than the amount of services billed. The final rules offer increased flexibility to providers, reduce administrative burdens, and emphasize the interests of the patient.
The Physician Self-Referral Law, or the Stark Law, was initially enacted to prohibit physicians from making referrals to entities in which the physician has a financial relationship. The ambiguous language in the Stark Law created uncertainty as to whether certain relationships might violate the law and discouraged potential innovative relationships. As such, the final rule creates exceptions to the self-referral prohibitions for specific value-based payment arrangements among various providers and suppliers, and offers new guidance for providers with a financial relationship governed by the Stark Law. Under the rule, a value-based arrangement is one that provides at least one value-based activity to a patient between the value-based enterprise and at least one of its participants, or the participants in the same value-based enterprise. A value-based activity can mean the provision of a service, an action, or refraining from taking an action, so long as the activity is reasonably curated to achieve a value-based purpose. The exceptions apply to all patients, not just Medicare beneficiaries. The final rule creates three new exceptions to the Stark Law:
- Value-based arrangements for participants in a value-based enterprise that is financially responsible for, and assumes the entire prospective financial risk, for the cost of all related patient care items and services for every patient;
- Value-based arrangement remuneration to physicians at meaningful downside financial risk of failing to reach the value-based purpose of the enterprise; and
- Value-based compensation arrangements, no matter the risk undertaken by the enterprise or participants. This exception also allows for monetary and nonmonetary remuneration among the parties.
The AKS is a criminal statute, focused on the intent of the provider, that prohibits intentional payments in exchange for referrals or other business under Federal healthcare programs. The final rule to the AKS adds new safe harbors to protect specific payment practices and business arrangements from AKS penalties to allow for improved coordination and patient care management and value-based care. Under the final rule, three new safe harbors for remuneration exchanged between those participating in value-based arrangements are created:
- Care coordination procedures that enhance quality, health outcomes, and efficiency, without necessitating that the participants assume risk. Protected remuneration under this safe harbor must be mainly used to engage in value-based activities directly associated with coordination and management of patient care;
- Value based arrangements involving the exchange of remuneration among a value-based entity that has substantial downside financial risk from a payor and a value-based participant that meaningfully shares in this financial risk; and
- The protection of remuneration between value-based entity and value-based participant in a value-based arrangement in which the entity assumes full financial risk for the cost of items and services covered by the payor for each patient.
For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in the Anti-Kickback Statute and Stark Law. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or firstname.lastname@example.org.