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HHS Looks to Fast Track New AKS, Stark Law Safe Harbors and Exceptions Amid Shift to Coordinated Care

The U.S. Department of Health and Human Services (HHS) and the HHS Office of the Inspector General (OIG) have noticed new trends in the health care space, and are responding with efforts to accelerate ways to update and add new safe harbors and exceptions involving the Anti-Kickback Statute (AKS) and the Stark Law, also known as the physician self-referral law. Under its recently launched “Regulatory Sprint to Coordinated Care,” the HHS intends to fast track the federal health care system’s transition into a value-based system which rewards coordinated care.

About the Sprint: HHS’ Recent Information Request

The “Regulatory Sprint,” which may have faced a few hiccups given the recent partial government shutdown, stems from a pair of information requests – including the most recent OIG rule proposal published in August of 2018, which requested input from the health care industry to help with the modification and / or creation of:

  • New AKS safe harbors; and
  • New beneficiary inducements Civil Monetary Penalty (CMP) exceptions to its definition of “remuneration.”

The goal behind these objectives is to facilitate a health care system in which care coordination is promoted, and the delivery of value-based care advanced – all while, the OIG carefully notes, ensuring protections against fraud and abuse. By requesting information from industry practitioners and providers, HHS could use that insight to issue guidance and revised regulations which not only address existing obstacles for coordinating care, but potentially incentivize and encourage it as well.

Potential Shakeups to AKS & Stark Exceptions Amid Shift to Coordinated, Value-Based Care

While many industry experts and providers are supportive of the transition to a system of coordinated and value-based care, it’s being viewed cautiously as a lofty goal, particularly as it concerns federal government programs which have historically made updates in a manner more aptly described as a slow jog or meandering jaunt than a “regulatory sprint,” and which have been governed by a patchwork of notoriously complex and stringent regulations.

Still, the HHS has now made two requests for input and information, which suggests updates to fraud and abuse laws may very well be on the horizon. These two requests concern:

  • CMS Stark Exceptions – In June 2018, the Centers for Medicare & Medicaid Services (CMS) made a request to seek input on the Stark Law, a strict liability law which bars physicians from referring designated health services to any entity where they or their family have a financial relationship (even accidentally), unless an exception applies. That request focused on possible revisions or new exceptions, as well as redefining key terminology in the law, which apply to arrangements involving alternative payment models and novel financial arrangements.
  • OIG AKS Safe Harbors – As mentioned above, the latest request from the OIG seeks input for similar goals, including ways to modify / add new safe harbors under the AKS and redefine remuneration exceptions concerning beneficiary inducements CMP. A broad federal law distinct from the Stark Law in that it has both criminal and civil / administrative penalties, the Anti-Kickback Statute applies to any federal health care program, any referral, and makes it a crime to offer or exchange anything of value (remuneration) in order to reward or induce federal health care program business. Its CMP provision allows the OIG to impose substantial monetary penalties for various forms of fraud and abuse, including beneficiary inducement.

Given the broad scope of both the AKS and the Stark Law, and their differences, the HHS appears to be looking toward the future by entertaining potential updates and new safe harbors and exceptions which allow providers in certain relationships to avoid liability, investigations over fraud and abuse, and, ultimately, serious penalties – and more broadly help with the shift toward new reimbursement models.

What the HHS is Looking For: Provider Input & Insight

What regulators are looking for in terms of these requests are relatively specific. For example, they’ve request input on topics related to:

  • Promotion of coordinated, value-based care – Regulators are looking to better understand the structure of various arrangements that may implicate the Anti-Kickback Statute and beneficiary inducements CMP to potentially create new safe harbors and exceptions to how remuneration is defined. These include alternative payment models, the use of new technology, and other value-based, coordinated, and new financial arrangements.
  • Beneficiary engagement and improvement of their care – Information received from providers could help with improving beneficiary engagement and quality of care via effective incentives, as well as ways to reduce cost-sharing obligations.
  • Evaluating current fraud and abuse waivers – Regulators may refine current CMS waivers based on what structures work best, or eliminate waivers that create unnecessary burdens or barriers for testing models and operating its shared savings program.
  • Cybersecurity services and digital information sharing – The CMS and OIG currently permit donations from providers and others in the health care industry for certain services involving electronic health records and information, but may expand those permitted donations if current fraud and abuse laws create barriers to the advancement of cybersecurity and digital information services.
  • ACO beneficiary incentives – The OIG will use input from providers to develop any needed safeguards for safe harbors involving conditions on payments ACOs make to beneficiaries under an ACO Beneficiary Incentive Program, which were recently permitted under the 2018 Bipartisan Budget Act.
  • The definition of “telehealth technologies” – The Bipartisan Budget Act also created a new exception for “telehealth technologies” provided to end-stage renal disease patients on home dialysis paid for by Medicare (as of January 1, 2019), stipulating that: (1) they aren’t offered as a solicitation or advertisement; (2) they’re provided in relation to telehealth services involving a patient’s ESRD; and (3) they meet other OIG requirements. The OIG would use input on this exception to better define these “telehealth technologies” and provide effective examples.
  • AKS and Stark Law overlaps – Because the ultimate goal is to foster the federal health care system to a more value-based system, the OIG will be closely evaluating specific situations where: (1) AKS safe harbors and Stark exceptions should be more closely aligned; and (2) Stark exceptions shouldn’t have corresponding Anti-Kickback safe harbors. Given the differences between the Stark Law and the criminal Anti-Kickback Statute, the OIG and CMS are reconsidering areas of overlap so as to improve the coordinated, valued-based transition.

A Health Care Legal Team For Life

As health care reimbursement trends toward coordinated care and value-based models, and away from fee-for-service arrangements, providers have the opportunity to help create and refine the very laws to which they’ll be subject. While it’s unclear how fast the “regulatory sprint” may be, the recent OIG and CMS requests for input suggest HHS is certain heading toward needed updates to current fraud and abuse laws.

Hendershot Cowart P.C. is a recognized Texas leader in health care and medical law, and business law – in part because we’re comprised of award-winning attorneys with decades of collective experience, and because we’ve demonstrated our ability to help clients navigate the complex and constantly changing laws and regulatory framework surrounding the health care space.

If you have questions about our health and medical law services – from practice set-up and medical contracts to regulatory compliance and fraud defense – we’re here to help. Call (713) 909-7323 or contact us online. Based in Houston, our firm proudly serves health care clients throughout Texas and beyond.


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