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HHS Finalizes Revamp of Stark Law, Anti-Kickback Rules

November 24, 2020

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CONTACTS
Phoebe Ramsey, Sr. Regulatory Analyst, Quality & Payment Policy
Gayle Lee, Director, Physician Payment & Quality

The Department of Health and Human Services (HHS) released two final rules on Nov. 20 revamping fraud and abuse regulations to reduce regulatory barriers to care coordination and value-based care. The Centers for Medicare & Medicaid Services (CMS) rule modernizes the physician self-referral regulations (“Stark Law”) and the complimentary HHS Office of the Inspector General (OIG) rule revises the safe harbors under the anti-kickback statute (AKS). The AAMC submitted comments to the CMS and the HHS OIG broadly supporting the Department’s efforts, and the final rules largely follow and in some cases improve upon the proposed rules. The final rules will go into effect on Jan. 19, 2021, unless otherwise noted in the rules.

Highlights include:

The CMS “Modernizing and Clarifying the Physician Self-Referral Regulations” Rule

Creation of New Exceptions. The final rule creates new exceptions for arrangements between physicians and other health care providers, which are intended to foster better coordinated and managed patient care. These exceptions include: 

  • Arrangements That Facilitate Value-based Health Care Delivery and Payment: Establishes exceptions and definitions for certain value-based care arrangements between or among physicians, providers, and suppliers. Similar to the HHS OIG’s framework, the CMS distinguishes value-based exceptions on the basis of “full financial risk,” “meaningful downside financial risk,” and no-risk value-based arrangements. In response to comments, the final rule incorporates a lower threshold for meaningful downside financial risk.
  • Limited Remuneration: Protects certain arrangements under which a physician receives limited remuneration (not to exceed $5,000 per year) for items or services actually provided by the physician.
  • Donations of Cybersecurity Technology and Related Services: Protects nonmonetary remuneration necessary to implement, maintain, or reestablish cybersecurity.

Modification of Existing Exceptions. The final rule amends the existing exception for the donation of electronic health records (EHR) items and services.

Additional Guidance and Clarifications. The final rule expands on key requirements that must be met to comply with the Stark Law, such as the definition of compensation that is “fair market value.”

HHS OIG “Revisions to the Safe Harbors Under the AKS and Civil Monetary Penalty (CMP) Rules Regarding Beneficiary Inducements” Rule

Creation of Seven New Safe Harbors. Safe harbors vary by the type of renumeration protected, level of financial risk assumed, and safeguards included, and the final rule creates new terminology to define the universe of value-based arrangements. These new safe harbors are:

  • Care Coordination Arrangements to Improve Quality, Health Outcomes, and Efficiency: Allows for value-based entities (VBEs) to enter into certain arrangements without requiring the parties to assume risk, but only protects in-kind remuneration and includes a contribution requirement for recipients.
  •  Value-Based Arrangements With Substantial Downside Financial Risk: Protects both in-kind and monetary remuneration for arrangements between a VBE that assumes sufficient risk (as determined by one of three methodologies) from a payor and a VBE participant that meaningfully shares in that risk.
  • Value-Based Arrangements With Full Financial Risk: Affords the greatest flexibilities and protection for both in-kind and monetary remuneration for those arrangements where a VBE is at risk on a prospective basis for the cost of all items and services covered for each patient in the target patient population for at least one year.
  • Patient Engagement and Support: Allows providers to furnish certain tools and supports to patients to improve quality, health outcomes, and efficiency. To safeguard against inappropriate incentives, the rule incorporates additional limitations on parties seeking safe harbor protection, such as a fixed dollar cap on protected tools and supports provided to patients and enhanced restrictions on marketing and patient recruitment.
  • CMS-sponsored Models: Reduces the need for separate and distinct HHS OIG fraud and abuse waivers for new CMS-sponsored models and CMS-sponsored model patient incentives. 
  • Cybersecurity and Technology Services: Allows for the donations of cybersecurity technology and services. In recognition of the urgent problem of cyber threats to the health care industry, the final rule broadens this new safe harbor to include cybersecurity-related hardware.
  • Accountable Care Organization Beneficiary Incentive Programs: Codifies the statutory exception to the definition of “remuneration” under the AKS related to incentive programs for the Medicare Shared Savings Program.

Modification to Four Existing Safe Harbors. The final rule adds protections to the EHR Items and Services safe harbor regarding interoperability, and it removes the sunset date and flexibility for certain outcomes-based payments and part-time arrangements under the Personal Services and Management Contracts safe harbor. It also expands and modifies mileage limits for patients discharged from an inpatient facility or released from a hospital after being placed in observation status for at least 24 hours under the Local Transportation safe harbor.

Additionally, the final rule creates one new exception under the Beneficiary Inducements CMP to protect telehealth for in-home dialysis required by the Budget Act of 2018.

Fact sheets on the rules are available for the CMS rule and the HHS OIG rule.

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