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Observation Deck
Modifications to Stark and the Anti-Kickback Statute
Physician self-referral law and the federal anti-kickback statute have seen modifications in the move to value-based care. — Jeffrey S. Baird, Esq.
EDITOR’S NOTE: This article is a summary. Baird has gener- ously authored a deep analysis of the full topic that we have posted online. There is much that providers need to under- stand on this issue, and we highly recommended they read it.
The full feature is at hme-business.com/vbclaw.
The fee-for-service payment model is transitioning to a value-based care (VBC) model, which is premised on the collaboration of providers and the achievement of certain metrics.
The challenge is that VBC has run up against the federal physician self-referral law (Stark) and the federal anti-kickback statute (AKS). Recognizing this challenge, on November 20, 2020, CMS and the OIG issued Final Rules that updated Stark and the AKS.
Stark
New Value-Based Enterprise (VBE) Exceptions:
• TheFullFinancialRiskexceptionappliestovalue-basedarrangements among VBE participants that have assumed full financial risk for the cost of patient care in the target patient population for a defined time period. • MeaningfulDownsideFinancialRisktothePhysicianexception protects remuneration paid under a value-based arrangement where the physician assumes a meaningful level of financial risk.
• TheValue-BasedArrangementsexceptionpertainstovalue-basedar- rangements ... even if no risk is assumed by the VBE participants.
Execution of Documents. Documents can be prepared and executed within 90 days of the beginning of the arrangement.
Set in Advance. Compensation may be modified during the term of an agreement where the modified compensation is not based on the volume or value of referrals.
Disallowance. CMS deleted the rules on the period of disallowance. Parties to an arrangement can correct errors for up to 90 days after a compensation arrangement ends.
Indirect Compensation. Exceptions are available to protect a physi- cian’s referrals to an entity when the indirect compensation includes a value-based arrangement to which the physician is a direct party.
Limited Remuneration to a Physician. Limited remuneration (not to exceed $5,000 per year) may be paid to a physician, for substantive services rendered, without a written agreement or compensation set in advance.
Patient Choice. An entity may direct a physician to refer to a specific provider.
Fair Market Value (FMV). FMV is the value in an arm’s-length trans- action consistent with the general market value of the transaction.
Volume or Value of Referrals/Business Generated. The Final Rule discusses when arrangements will be construed as taking into account the volume or value of referrals or other business generated.
Commercial Reasonableness. The arrangement needs to make sense as a means to accomplish the parties’ goals.
Rental of Office Space and Equipment These exceptions do not prohibit multiple lessees from using the space or equipment.
Group Practice. Effective January 1, 2022, if a physician group practice establishes a valid value-based model, then distribution of profits to physician members will be construed as not taking into account the volume or value of the physicians’ referrals.
Consistency of Stark and the AKS. An arrangement no longer must comply with the AKS as a precondition to meeting a Stark exception.
Anti-Kickback Statute
New VBE Safe Harbors. With limited exceptions, DME suppliers may not utilize the following new value-based safe harbors:
• TheValue-BasedArrangementswithFullFinancialRisksafeharbor provides the greatest flexibility, because it requires the assumption of the most risk.
• TheValue-BasedArrangementswithSubstantialDownsideRisksafe harbor protects both in-kind and monetary remuneration if the VBE participants assume a certain amount of risk.
• TheCareCoordinationArrangementssafeharbordoesnotrequirethe participants to take on risk.
New Patient Engagement and Support Safe Harbor. This new safe harbor, which is inapplicable to DME suppliers, provides protection for certain patient engagement tools.
Modifications of Existing Safe Harbors:
• LocalTransportationsafeharbor.Mileagelimitsareincreasedto75 miles for residents in rural areas.
• Warrantysafeharbor.Protectionisaffordedtoabundleofoneormore items and related services.
• PersonalServicesandManagementContractsandOutcomes-Based Payments safe harbor now includes the protection for certain outcome- based payment arrangements. This new provision is not available to DME suppliers. The requirement that the aggregate payment for a management or services arrangement be set out in advance is removed; only the meth- odology needs to be set in advance. The requirement that a part-time arrangement have a schedule of services specifically set out in the written agreement is removed.
Anti-Kickback Statute
Electronic Health Records (EHR). CMS and the OIG relaxed the EHR Stark exception and AKS safe harbor.
Cybersecurity Technology. The goal of the new safe harbor and Stark exception is to facilitate the donation of cybersecurity technology.
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Jeffrey S. Baird, Esq. is Chairman of the Health Care Group at law firm Brown & Fortunato. Baird represents HME companies, pharmacies, infusion companies, manufacturers, and other healthcare providers. He can be reached at (806) 345-6320 or jbaird@bf-law.com.