CMS and OIG Propose Stark Law and Anti-Kickback Statute Reforms

This week, the Department of Health and Human Services (HHS) announced proposed changes, by the Centers for Medicare & Medicaid Services (CMS) and the Office of the Inspector General (OIG), to modernize and clarify the regulations that interpret the Physician Self-Referral Law (the “Stark Law”) and the Federal Anti-Kickback Statute.

The proposed rules are aimed at providing greater certainty for health care providers participating in value-based arrangements and providing coordinated care for patients. The proposals would ease the compliance burden for health care providers across the industry, while maintaining strong safeguards to protect patients and programs from fraud and abuse.

The proposed rules are part of HHS’ Regulatory Sprint to Coordinated Care, which seeks to promote value-based care by examining federal regulations that impede efforts among providers to better coordinate care for patients.

The Stark Law’s new value-based exceptions, under the proposed rule issued by CMS, acknowledge that incentives are different in a health care system that pays for the value, rather than the volume, of services provided. They include proper safeguards that ensure the Stark Law will continue to provide meaningful protection against overutilization and other harms, while giving physicians and other health care providers added flexibility to improve the quality of care for their patients.

The proposed changes to the regulations related to the Federal Anti-Kickback Statute and the Civil Monetary Penalties Law issued by the OIG would, if finalized, address the longstanding concern that these laws unnecessarily limit the ways in which health care providers can coordinate care for patients. The changes would offer flexibility for beneficial innovation and improved coordinated care through, for example, outcome-based payment arrangements that reward improvements in patient health. The changes also would make it easier for physicians and other health care providers to ensure they are complying with the law by offering specific safe harbors for these arrangements.

Below are examples involving coordinated care, value-based care, data sharing, and patient engagement activities that, depending on the facts, could currently be difficult to fit under existing protections and could potentially be protected by the Stark Law, Anti-Kickback Statute, or Civil Monetary Penalties Law proposals if all applicable conditions are met:

• In an effort to coordinate care and better manage the care of 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 health care 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 who 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.

Read OIG’s proposed rule .

Read CMS’ proposed rule.