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HHS Proposes Anti-Kickback Statute and Stark Law Revisions Protecting Value-Based Arrangements and Care Coordination


HHS Proposes Anti-Kickback Statute and Stark Law Revisions Protecting Value-Based Arrangements and Care Coordination

On October 9, 2019, the U.S. Department of Health and Human Services (“HHS”), Office of Inspector General (“OIG”) issued a Notice of Proposed Rulemaking to update the safe harbors to the federal Anti-Kickback Statute (“AKS”) and the Civil Monetary Penalties Law (“CMP Law”) related to the prohibition on beneficiary inducements.

At the same time, Centers for Medicare & Medicaid Services (“CMS”) issued a Notice of Proposed Rulemaking to update the exceptions to the federal physician self-referral law (“Stark Law”).

Together, the proposals are part of a larger HHS effort, the Regulatory Sprint to Coordinated Care, which seeks to facilitate the movement of the healthcare system from fee-for-service reimbursement towards value-based payments and greater coordination of care. The proposed rules aim to provide flexibility to health care providers in this transition.

The proposed rules would create new protections under the AKS and Stark Law for healthcare entities engaging in value-based arrangements, allowing “value based enterprises” to design and engage in certain “value-based activities.” A value-based arrangement would be required to have a “value-based purpose” related to coordinating and managing care, improving quality of care, reducing the cost, and/or transitioning to health care delivery and payment mechanisms based on the quality of care and control of costs of care. The proposed rules define these terms in greater detail as they apply to the AKS and Stark Law, respectively.

The OIG and CMS also propose new protection relating to donations of certain cybersecurity technology relating to quality, health outcomes and efficacy.

The OIG proposes an AKS safe harbor to protect certain remuneration arrangements involving CMS-sponsored models, intending to reduce the need for separate and distinct fraud and abuse waivers for new CMS-sponsored models.

The OIG seeks to modify existing safe harbors that are impacted by value-based arrangements, including, notably, a relaxing of the personal services and management agreement safe harbor for part-time arrangements involving situations where the aggregate compensation is not known in advance. The OIG’s other proposed modifications amend the following safe harbors: to incentivize value-based arrangements and coordination of care; electronic health records items and services; warranties; local transportation; and Accountable Care Organization (ACO) Beneficiary Incentive Programs.

The change to the CMP Law involves implementing a new statutory provision relating to beneficiary inducements for “telehealth technologies” furnished to certain in-home dialysis patients.

In a press release, HHS offered examples of activities that may be protected under the AKS, CMP Law, and Stark Law if “all applicable conditions are met”:

  • “In an effort to coordinate care and better manage the care of their shared patients, a specialty physician practice could share data analytics services with a primary care physician practice.
  • Hospitals and physicians could work together in new ways to coordinate care for patients being discharged from the hospital. 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 without charge to help them remember to take their medications on time. The practice could also 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 the cybersecurity of nearby providers that it works with frequently. To do so, it could donate, for free, cybersecurity software to each physician that refers patients to its hospital. The hospital and the physicians often share information about their patients, so it is important that there are no weak links that might compromise everyone else. The software would help ensure that hackers cannot attack the physician’s computers. Improving each physician’s cybersecurity 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 and two-way, real-time interactive communication between the patient, facility, and physician. In addition, the facility could equip the physicians with data analytics software to help them monitor patients’ health outcomes.”

For more information on this topic contact Jerry Aben at 734.214.7648 or gaben@dykema.com, Serj Mooradian at 734.214.7643 or smooradian@dykema.com or your regular Dykema relationship attorney.

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