HHS Continues the “Sprint to Coordinated Care”
Monday, October 1, 2018

On August 27, 2018, the Office of the Inspector General (OIG) of the Department of Health and Human Services (HHS) issued a request for information (RFI) seeking comment on the anti-kickback statute (AKS) and the beneficiary inducement prohibition to the civil monetary penalty law (CMP) as potential barriers to coordinated and value-based care. The August 27 RFI was the second RFI issued as part of HHS’s “Regulatory Sprint to Coordinated Care,” an ongoing effort to accelerate the transition from a fee for-service system to a value-based system that emphasizes care coordination.

Background - The Regulatory Sprint

HHS announced the Regulatory Sprint on June 25, 2018. The agency stated that it is “focused on identifying regulatory requirements or prohibitions that may act as barriers to coordinated care, assessing whether those regulatory provisions are unnecessary obstacles to coordinated care, and issuing guidance or revising regulations to address such obstacles.” To date, OIG has identified three targets for reform: the AKS, the CMP, and the physician self-referral law (or “Stark Law”).

June 25 RFI - The Stark Law

OIG identified the Stark Law as the Regulatory Sprint’s first target in an RFI published on June 25, 2018. The Stark Law’s intended purpose is to reduce potential conflict between a physician’s health care decision making and the physician’s financial interests. However, the law was designed in a fee-for-service environment, and can be a point of tension for value-based systems and alternative payment models reliant on financial incentives for physicians. Although well-designed incentives may reduce the likelihood of overutilization and conflicted medical decision making, the incentives may still fall outside of an existing Stark Law exception. Since the Stark Law is a strict liability statute, mere noncompliance with an exception--no matter how laudable the arrangement--can open up the parties to significant legal exposure. The OIG seeks to remedy this impediment to the shift away from fee-for-service.

In particular, OIG asked for comment on:

  • The creation of new exceptions to the Stark Law for arrangements that arise due to participation in alternative payment models.
  • Possible approaches to defining “commercial reasonableness” in the context of the exceptions to the physician self-referral law.
  • Possible approaches to modifying the definition of “fair market value” consistent with the statute and in the context of the exceptions to the physician self-referral law.
  • Thoughts on when, in the context of alternative payment models and other novel financial arrangements, compensation should be considered to “take into account the volume or value of referrals” by a physician

August 27 RFI – The AKS and CMP

On August 27, 2018, OIG published a second RFI seeking comment on the safe harbors to the AKS and the exceptions to the CMP as they relate to the shift towards value-based payment systems and coordinated care. The RFI identifies four topics for public input.

First, OIG requested information on care coordination arrangements, value-based arrangements, novel financial arrangements, and alternative payment models that health care entities are interested pursuing, but that may implicate the AKS or CMP. OIG is seeking input on what new or modified safe harbors and exceptions might be needed to protect such arrangements. With regard to value-based arrangements, OIG requested comments on how “value” should be defined to determine compliance with any new safe harbor or exception.

Second, OIG requested information on items and services that entities would like to provide to beneficiaries as incentives. OIG stated that these incentives should contribute to or improve the quality of care, care coordination, and patient engagement. OIG is considering whether beneficiary incentives for adherence to a treatment plan or medication program should be treated differently than other incentives, and whether entities should be required to disclose such incentives to OIG. Of particular significance to pharmacy providers, OIG is requesting input on how waivers and reductions in beneficiary cost-sharing amounts may improve care delivery, enhance value-based arrangements, and promote quality of care. Finally, OIG is seeking input on how OIG should define “cash equivalent,” “gift card,” “in-kind items and services,” and “nonmonetary remuneration” in future rulemaking.

Third, OIG requested information on a host of related topics. These include: 1) fraud and abuse waivers currently used in the Medicare Shared Savings Program for Accountable Care Organizations; 2) free or subsidized cyber security related items and services; 3) the implementation of new exceptions and safe harbors created by the Balanced Budget Act of 2018 for incentive payments to beneficiaries made by an ACO, and telehealth technologies.

Fourth, and finally, the RFI seeks comment on specific circumstances in which the safe harbors to the AKS and the exceptions to the Stark Law should be brought into alignment to accelerate the transformation to a value-based health care system that includes care coordination.

Conclusion

Though OIG has not yet issued proposed rules as part of the Regulatory Sprint to Coordinated Care, the June 25 and August 27 RFIs demonstrate that OIG is serious about aligning its regulatory framework with the ongoing shift to value-based systems. We will continue to report on the developments of HHS’s Regulatory Sprint. Those interested in commenting on the August 27 RFI must do so by October 26, 2018.

 

NLR Logo

We collaborate with the world's leading lawyers to deliver news tailored for you. Sign Up to receive our free e-Newsbulletins

 

Sign Up for e-NewsBulletins