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Volume XI, Number 25

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Stark and Anti-Kickback Final Rules Aim to Facilitate Transition to Value-Based Care and Ease Administrative Burdens

On Nov. 20, 2020, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) and the Centers for Medicare and Medicaid Services (CMS) issued two final rules, which implement changes to the Physician-Self Referral Law (Stark Law) and the Anti-Kickback Statue (AKS) regulations. The proposed rules were released in October of 2019.  While many anticipated the final rules would be issued in August of 2020, CMS announced a delay to the publication of the final Stark Law rule, stating it would not be released until August of 2021 due to a need to work through “the complexity of the issues raised by the comments received.”[1]  The early release of the final AKS and Stark Law rules came unexpectedly but marks a welcomed end to the extended wait for these long-anticipated rules.

The accelerated release of the final Stark Law and AKS rules in 2020 rather than 2021 came as a result of HHS’s launch of the “Regulatory Sprint to Coordinated Care.” The Regulatory Sprint to Coordinated Care “aims to remove potential regulatory barriers to care coordination and value-based care” by encouraging and making improvements in four key areas: (a) a patient’s ability to understand treatment plans and make empowered decisions; (b) coordination among providers along the patient’s full care journey; (c) incentives for providers to coordinate, collaborate, and provide patients with tools to be more involved; and (d) information-sharing among providers, facilities, and other stakeholders in a manner that facilitates efficient care while preserving and protecting patient access to data. 

CMS’s transition to a value-based reimbursement model from a volume-based model necessitated these updates to the Stark Law and the AKS, both of which were enacted at a time when Medicare payment was exclusively based on volume rather than value. The final rules also seek to reduce the administrative burdens imposed on providers, thus allowing providers the flexibility needed to foster “beneficial innovation and better coordinated patient care with necessary safeguards to protect patients and federal health care programs.”  CMS Administrator Seema Verma, in a statement announcing CMS’s promulgation of its final rule, said, “That sound you hear is the mingled cheers and exclamations of relief from doctors and other health care professionals across the county as we lift the weight of our punishing bureaucracy from their backs.”[2] 

CMS’s final Stark Law rule includes the following significant modifications: 

  • New exceptions that account for alternative payment models and care coordination arrangements;

  • A new exception to protect entities that donate cybersecurity technology and services to physicians; and

  • Guidance and clarification on key requirements to Stark Law exceptions, such as commercial reasonableness, fair market value, and compensation that “takes into account” the volume or value of referrals and is “set in advance.”

OIG’s final rule includes the following significant changes to the AKS regulations:

  • Addition of three new safe harbors for value-based arrangements;

  • Addition of one new safe harbor for patient engagement and support furnished to participants in value-based arrangements;

  • Addition of a new safe harbor for CMS-sponsored model arrangements and patient incentives;

  • Addition of a new safe harbor for remuneration in the form of cybersecurity technology and services;

  • Modifications to the electronic health records items and services safe harbor;

  • Modifications to the personal services and management contracts safe harbor;

  • Addition of a new safe harbor for outcomes-based payments; 

  • Modifications to the safe harbor for warranties;

  • Modifications to the safe harbor for local transportation; and

  • Codification of the statutory exception to the definition of “remuneration” related to ACO Beneficiary Incentive Programs for the Medicare Shared Savings Program.

The OIG final rule also modifies the beneficiary inducement provisions of the Civil Monetary Penalty regulations by incorporating a new statutory exception to the prohibition on beneficiary inducements for “telehealth technologies” furnished to certain in-home dialysis patients

[1] See https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-18867.pdf

[2] See https://www.cms.gov/newsroom/press-releases/cms-announces-historic-changes-physician-self-referral-regulations.

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© 2020 Dinsmore & Shohl LLP. All rights reserved.National Law Review, Volume X, Number 329
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Eric J. Plinke, Dinsmore Law, Health Care Lawyer, Corporate Attorney
Partner

Eric Plinke is a Partner in the Corporate Department and Health Law Practice Group, and he routinely advises corporate and individual clients regarding a wide-range of health care industry legal issues. He has counseled clients in practice formation and acquisition, hospital and joint venture transactions, hospital and medical practice affiliations, contract review and preparation, compliance programs, HIPAA regulations, scope of practice issues, telemedicine and Stark law and Anti-kickback statutes, as well as significant experience counseling in ambulatory surgery centers and other joint...

614-227-4213
Stacey A. Borowicz, Regulatory, Law and Healthcarre industry attorney at Dinsmore Shohl
Associate

Stacey Borowicz is an accomplished attorney who dedicates the majority of her business and regulatory practice to health care providers. Stacey brings with her more than a decade of front line experience in the health care industry as she acquired a rare set of skills as a medical researcher/scientist prior to entering the practice of law.

Stacey's experience in the healthcare representation is diverse and includes Medicare/Medicaid audit and overpayment appeals, voluntary disclosures and refunds. Stacey also brings a wealth of experience in...

614-227-4212
Timothy Cahill Health Care Attorney Dinsmore Law Firm
Partner Of Counsel

Tim is an attorney with more than two decades of experience in health care-related fields. He has worked as in-house counsel and external counsel for non-profit and commercial health care organizations, health systems, hospitals, physicians and physician groups, joint ventures, and other corporate clients. Most recently, Tim served in the role of general counsel of a regional health system, working closely with the executive team and board to further the organization’s strategic mission and significantly improve operating revenues.

In his practice, Tim has addressed a wide range...

614-227-4274
Courtney White, Dinsmore Law Firm, Corporate Attorney
Associate

Courtney is a member of our Corporate Department where she focuses her practice on health care law.

While at the Ohio State University Moritz College of Law, she was a managing editor on the Ohio State Law Journal. She also earned the Ernest Karam Book Award for academic achievement in Legal Analysis and Writing and was named a Public Service Fellow with Dean’s Special Recognition.

614-628-6952
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