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Course | Overview | Compliance

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Course | Overview | Compliance

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This course explains the basics of HIPAA's Privacy Rule and what you need to consider when handling patients' Protected Health Information (PHI). It also outlines the rights that patients have under HIPAA.

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News | Compliance

Anti-Fraud Overhaul ‘Sprint’ Coming

News | Compliance

Anti-Fraud Overhaul ‘Sprint’ Coming

Jan. 30—In 2019, the Trump administration plans to implement regulatory overhauls of several administrative barriers to the proliferation of value-based payment, according to a senior administration official.

Much-sought clarity on federal anti-fraud regulations could come for providers in rules implemented this year, say administration officials.


Jan. 30—In 2019, the Trump administration plans to implement regulatory overhauls of several administrative barriers to the proliferation of value-based payment, according to a senior administration official.

Following the reception of industry feedback in 2018—and some ongoing comments—the administration has launched wide-ranging and fast-moving rewrites of regulations affecting the Stark Law, the Anti-Kickback Statute, the Health Insurance Portability and Accountability Act, and 42 CFR Part 2. The last governs patient privacy rights surrounding the sharing of substance abuse information.

“It’s a sprint—a sprint from a governmental point of view,” said Eric Hargan, deputy secretary of the U.S. Department of Health and Human Services (HHS). “We are intent on gathering the information we need and moving to rule making as soon as possible.”

The goal of the overhaul is to mitigate regulatory barriers to the kind of provider coordination that can lower costs and improve outcomes, Hargan said in a Washington, D.C., policy address. Specifically, the changes aim to accelerate the transition to value-based payment (VBP), which “hasn’t been all that rapid.” For example, the share of Medicare payments made through VBP increased from 13 percent in 2017 to 18 percent in 2018.

“We have to take a holistic view of all of our policies to push that effort along,” Hargan said.

Since the Centers for Medicare and Medicaid Services (CMS) has started to approve VBP models in recent years, it has relied on waiver authority to avoid Stark and Anti-Kickback barriers. But Hargan said the regulatory rewrite aims to greatly expand such allowances while taking care to maintain protections against widespread fraud.

The rewrite aims to promote both coordination and competition. “They don’t need to be at odds,” Hargan said.

Hargan said the existing anti-fraud rules incentivize consolidation—such as hospital purchases of physician practices—and the administration wants regulations to be as ownership-agnostic as possible.

Changes Needed

In its 2018 requests for comments on the Stark Law, the administration received 3,500 pages of responses.

Similarly, wide-ranging comments on possible changes to the Anti-Kickback Statute included concerns that VBP models hold providers financially accountable for clinical outcomes even for patients who cannot get to appointments or who cannot be provided with home-based measurement and communication tools for managing chronic conditions.

“We got a lot of great ideas” on needed regulatory changes, Hargan said.

Hargan encouraged providers to continue submitting ideas on needed anti-fraud regulatory changes and said the coming rules will include both large and small reforms that should be implemented this year.

Although Hargan would not specify which provisions will be included in the overhaul, he noted that HHS is “undertaking a lot of efforts to understand” the social determinants of health.

In anticipation of potential changes to the Anti-Kickback Statute, which is a criminal code enforced by the Department of Justice (DOJ), HHS has been coordinating with DOJ and the HHS Office of the Inspector General, according to Hargan.

On regulatory changes coming to 42 CFR Part 2, Hargan said, “We’ve been hearing an awful lot of problems in this space between balancing privacy and the need to coordinate care” of substance abuse.

Specifically, providers have warned that the extensive patient permissions needed to exchange such information among providers caring for a patient has impacted their ability to provide timely care. The Substance Abuse and Mental Health Services Administration is accepting comments on needed changes to 42 CFR Part 2 through February.

Industry Reaction

The proposed changes drew praise from Tim Gronniger, president of Caravan Health and former chief of staff and director of delivery system reform at CMS.

“The fear of Stark and Anti-Kickback colors every conversation between hospitals and doctors,” Gronniger said at the policy event. “Hospital administrators and physicians are told by lawyers, ‘No, you can’t do that because you will go to jail,’ and that pretty much ends the conversation” on coordinating care.

Bobbie Gostout, MD, vice president for the Mayo Clinic, said her organization has a range of finance, legal, and compliance staff who are constantly scrambling to figure out whether Mayo’s new models of care violate vaguely worded federal anti-fraud statutes and rules.

“We don’t want to be anywhere close to the line because the hazards are so great for our organization,” Gostout said.

Kimberly Brandt, principal deputy administrator at CMS, said comments related to Stark were among the top four categories received in 2018 when CMS asked for needed regulatory changes as part of each of its regular provider payment rules.

“There were a number of people who thought the lack of certainty or clarity was impeding their ability to coordinate care,” Brandt said.

Provider requests included asking whether rules prohibit hospitals from donating cybersecurity technology to physician practices—an obstacle that regulators hadn’t even considered, Brandt said.

Many rural providers expressed concerns they could not provide in-kind contributions involving small expenditures, such as for food for physicians trapped by snowstorms at their facilities.

Industry advisers hope the effort also helps address a central limitation in CMS’s use of anti-fraud waivers—they don’t protect providers participating with health plans in VBP efforts.

“You could make an argument that they unfairly favor CMS models,” Gronniger said of the waivers. “There are some reforms that could be led by the private sector but not are even considered because of the obstacles here.”

However, due to concerns that providers may not pass along anti-fraud reform savings to patients under fee for service, CMS should accelerate the shift to VBP models as part of the anti-fraud overhaul, Gronniger said.

One criticism of the effort was that it falls short of needed statutory changes—particularly related to the Anti-Kickback Statute.

Kevin McAnaney, an attorney specializing in healthcare anti-fraud enforcement, said legislative changes to the Anti-Kickback Statute are needed because little of it is governed by regulations, and Congress allows only narrow exceptions. An updated statute with broad exceptions is the “only way to get DOJ to listen,” McAnaney said.

“The exceptions need to be broad—the current narrow ones are too proscriptive and restrictive and don’t promote real innovation in the delivery of care,” McAnaney said.

Stark Law statutory changes could provide much-needed clarity, the lack of which is the leading concern of providers, he said.

Brandt, of CMS, said, “We believe we have a fair amount of flexibility within the existing statute, but it’s always helpful to have permanent changes in the statute.”

She has seen some interest in anti-fraud legislative changes in Congress and anticipates a bill focused on mitigating penalties for unintended technical violations of the Stark Law.

This week, Sen. Bill Cassidy (R-La.) offered a draft of the Patient Affordability Value and Efficiency Act, which would exempt value-based contracting arrangements from the Anti-Kickback Statute and Stark physician self-referral laws, as well as Medicaid best price requirements.

“Lifting these restrictions would significantly advance the movement from volume-based payments to alternative payment models and risk-based arrangements,” Blair Childs, senior vice president of Public Affairs at Premier, said in a statement. “At the same time, the bill would help address rising drug costs by giving providers, payers and suppliers the opportunity to work together to lower costs.”


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare 

About the Authors

Rich Daly
HFMA senior writer/editor

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