At the last hour, CMS extended the deadline for publishing much anticipated changes to the Stark Law. Originally expected for publication this past August, CMS extended the deadline to August 2021, noting that “… we are still working through the complexity of the issues raised by comments received on the proposed rule and therefore we are not able to meet the announced publication target date.” The OIG’s proposed counterpart rule implementing changes under the Anti-Kickback Statute is currently with the OMB.
Combined, the CMS and OIG proposed rules published last October attempt to respond to the significant shift towards a greater focus on value-based quality patient care since the laws were originally enacted. They contain the potential for significant modernization of the Stark Law and Anti-kickback Statute as part of the “Regulatory Spring to Coordinated Care” as well as increased alignment and coordination between the two sets of laws.
CMS Proposed Rule
In the CMS Proposed Rule, CMS proposed to clarify several key terms which providers have long struggled with under Section 1877 of the Social Security Act (the “Stark Law”): fair market value, commercial reasonableness, designated health services, as well as related to compensation “set in advance” and that takes into account “the volume or value of referrals”. For example, CMS proposed to explicitly acknowledge that “commercial reasonableness” would not require profit to one or more of the parties involved. It also proposed to bring its definition of fair market value in line with that of the valuation service industry.
CMS also proposed to make changes to existing exceptions, including removing the sunset provision for the EHR exception and updating/expanding it to address cybersecurity technology, as well as changes to the office space/equipment rental exception to prohibit percentage-based compensation and per-click compensation formulas, among others. In addition, CMS set out three new critical value-based care exceptions:
- Full financial risk, where full financial risk from a payer is assumed for patient care services provided to a target population under the value-based arrangement
- Meaningful downside financial risk, where a physician either is responsible for paying no less than 25% of the value of remuneration received under the value-based arrangement or the full cost of all services/items provided to the patient which are covered by the payor, such as a capitated or global budget payment
- Other value-based arrangements, which meet certain safeguards and requirements
OIG Proposed Rule
The OIG Proposed Rule addresses changes to the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), as well as to the Civil Monetary Penalty that applies to beneficiary inducements, 42 U.S.C. § 1320a-7a(a)(5). Similar to the CMS Proposed Rule, it focuses extensively on coordinated care and value based arrangements.
OIG proposed to make changes to existing Safe Harbors designed to better protect outcomes and value based arrangements, as well as introduced new safe harbors. Key changes include:
- Similar to the CMS Proposed Rule, updating the existing EHR safe harbor to remove the sunset provision as well as updating/expanding it to include donations of cybersecurity technology, as well as creating a new safe harbor to address similar cybersecurity technology donations
- Changes to the existing Personal Services and Management Contracts safe harbor, including to protect certain outcomes-based payments, requiring that the methodology for determining compensation over the term of the agreement be set in advance, and eliminating the requirement that the schedule, length and exact charge be specified for services on a periodic, sporadic or part-time basis
- Changes to the Warranties safe harbor, including updating the definition of warranty and expanding the type of warranty arrangements covered by the safe harbor
- Changes to the Transportation safe harbor, including rural mileage limits and discharges from inpatient facilities
- New safe harbor for CMS model initiatives and arrangements
The OIG Proposed Rule also proposed to create three new safe harbors for value-based arrangements, similar to those established under the CMS Proposed Rule, and a new safe harbor for patient engagement and support.
- In-kind preventive items, goods or services, or patient support/tools such as health-related technology, monitoring tools and services, or supports/services to identify and address social determinants of health, which are provided to patients of a targeted population by value-based enterprise participants ($500 annually with few exceptions), and that have a direct connection to the coordination and management of care of the target patient population
- Value-based arrangement with full financial risk, where the value-based enterprise is financially responsible for the cost of all items and services covered by the applicable payor for each patient in the target patient population and is prospectively paid by the applicable payor
- Value-based arrangement with substantial downside risk, where substantial downside risk meets one of the specified methodologies for providing or arranging for the provision of items and services for a target patient population
- Care coordination arrangements to improve quality, health outcomes and efficiency, where recipients of non-monetary in-kind remuneration perform on certain evidence-based outcomes measures and meet other safeguards related to value-based activities
The AHA had previously expressed concern about the delay in finalizing both the CMS and OIG Proposed Rules.
“These rules take on even more significance in light of the COVID-19 pandemic. Throughout this crisis, the focus of hospitals and health systems during the pandemic has been ensuring safe care for patients, protecting health care professionals providing care, and supporting the health and safety of communities. These rules will remove unnecessary regulatory burden from hospitals and health systems, allow for enhanced care coordination for patients, improve quality, and reduce waste in the Medicare and Medicaid programs.”
However, CMS has indicated it does not intend to delay publication of the CMS Proposed Rule and is “working hard to finalize it.” It is unknown at this time whether any delays from CMS will affect publication of the OIG Proposed Rule.
