News | Legal and Regulatory Compliance

HHS proposes 16 Stark, anti-kickback changes

News | Legal and Regulatory Compliance

HHS proposes 16 Stark, anti-kickback changes

  • CMS proposed to create permanent Stark Law exceptions for value-based payment arrangements.
  • The new regulations would apply Stark exceptions to all payer types.
  • Another rule would create new anti-kickback safe harbors, including for payments to providers and patients.

The federal government proposed a range of changes to its rules implementing the Stark and anti-kickback laws this week, aiming to remove barriers to value-based payment arrangements.

First, a proposed rule from the Centers for Medicare & Medicaid Services (CMS) would implement changes in enforcement to the Stark Law, which was enacted in 1989. Separately, a proposed rule from the U.S. Department of Health and Human Services’ (HHS’s) Office of Inspector General (OIG) would change enforcement of the anti-kickback statute, which stems from a series of legislation that started with a 1981 law.

Stark updates designed to facilitate more value-based arrangements

Stark, also known as the physician self-referral law, was written to prevent physicians from ordering unnecessary services or from steering patients to less convenient, lower-quality or more expensive services due to a physician’s financial self-interest.

Six proposed enforcement changes for Stark include:

  • Creating new, permanent exceptions to the Stark Law for value-based arrangements
  • Applying Stark exceptions to arrangements for all patients, including those outside Medicare
  • Seeking comments on requiring provision of cost-of-care information at the point of a referral
  • Providing additional guidance on several key Stark compliance requirements
  • Providing guidance on how to determine whether compensation meets the “fair market value” requirement
  • Providing new flexibility for certain arrangements, such as cybersecurity technology donations, that don’t qualify as value-based payment arrangements

Anti-kickback changes add safe-harbor protections

The federal anti-kickback statute created criminal penalties for knowingly and willfully paying for business referrals for services covered by any federal healthcare program. Although some types of arrangements previously were offered “safe harbor” from prosecution, others had to be approved on a case-by-case basis.

Ten proposed rule changes for enforcement of the anti-kickback statute include:

  • Creating new safe harbors for certain payments between eligible participants in certain (mainly two-sided) value-based arrangements
  • Offering a new safe harbor for patient tools that improve quality, health outcomes and efficiency
  • Offering a new safe harbor for some payments in connection with CMS-sponsored models
  • Creating a new safe harbor for donations of cybersecurity technology and services
  • Modifying the existing safe harbor for electronic health record items and services to add cybersecurity technology and interoperability and to remove the sunset date
  • Adding flexibility to outcomes-based payments and part-time arrangements
  • Revising the definition of warranty and providing protection for bundled warranties
  • Expanding and modifying mileage limits for rural areas and for transportation of patients discharged from inpatient facilities
  • Codifying an exception to the definition of remuneration related to accountable care organization (ACO) beneficiary payments
  • Modifying the prohibition on beneficiary inducements for telehealth technologies furnished to certain in-home dialysis patients

What’s the reaction from the healthcare industry?

Provider advocates deeply engaged in value-based payment models have long sought Stark and anti-kickback law changes and generally were supportive of the proposed changes.

“Among the most critical changes are thoughtful reforms of the Stark Law to ensure that providers who are engaging in value-based arrangements — from care coordination models to full risk — can coordinate beneficiary care across high-value provider groups and settings,” said Blair Childs, senior vice president of public affairs for Premier. “Equally important are the administration’s proposed safe harbors under the anti-kickback statute and civil monetary penalty rules for beneficiary inducements across all CMS models.”

Clif Gaus, president and CEO of the National Association of ACOs (NAACOS), said Trump administration officials confirmed the new proposals do not supersede or override current HHS waivers for ACOs participating in the Medicare Shared Savings Program.

“NAACOS would encourage HHS to underscore this positive news and clarify that these new proposals build upon and give additional flexibility for today’s ACOs,” Gaus said.

Mary Grealy, president of the Healthcare Leadership Council, a coalition of chief executives of leading healthcare companies and institutions, said the HHS rule changes should be just the first steps toward bolstering value-based pay.

“Modernizing these rules can enable patient-centered health system transformation,” Grealy said. “It needs to be said that these proposed rules are the first step in a process that must also include congressional action to bring the relevant laws into this modern era of healthcare.”

About the Author

Rich Daly, HFMA senior writer/editor,

is based in the Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

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