Loosening Up Stark and Anti-Kickback Laws: What Would It Look Like?

https://mailchi.mp/burroughshealthcare/pc9ctbv4ft-1611881?e=7d3f834d2f

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The Department of Health and Human Services under the Trump administration has taken a deregulatory approach toward healthcare delivery. Its efforts on the payer side includes expanding the availability of individual health insurance policies that don’t conform to the rules of the Affordable Care Act, and more recently liberalizing the use of tax credits to purchase them.

However, the HHS has made one of its boldest proposals on the provider side. Over the summer, the Centers for Medicare & Medicaid Services issued a request for information (RFI) regarding potentially loosening up the Stark and anti-kickback laws.

Originally signed into law in 1972, the Anti-Kickback Statute barred any sort of renumeration to a provider to induce the referral of a patient. The Stark Law, enacted in 1990, bars doctors from referring Medicare or Medicaid patients to any ‘designated facility’ in which they have any form of a financial relationship. Both laws have been updated – and strengthened – numerous times in the intervening years. The HHS’ proposed changes would signal a shift away from how those laws are interpreted.

According to Mark Hardiman, partner with the Nelson Hardiman healthcare law firm in Los Angeles, the move represents a desire by HHS “to move all payments away from fee-for-service and make the providers at risk on both the upside and downside.”

Although the proportion of fee-for-service payments made to Medicare providers has shrunk in recent years, it still comprises the majority. A total of $392 billion in Medicare fee-for-service payments were made in 2017, according to the Kaiser Family Foundation, 56 percent of all payments made from the program. Although that’s down from 70 percent of all Medicare payments made a decade prior, the continuing aging of the Baby Boomer population and healthcare cost inflation is putting pressure on CMS and HHS to find ways to continue to pare back costs. Coordinated care initiatives such as accountable care organizations comprise just a small fraction of all Medicare payments, and many providers are balking about taking on too much downside financial risk when forming accountable care organizations.

 According to HHS, the intent is to make it easier for providers to implement value-based care initiatives. “Removing unnecessary government obstacles to care coordination is a key priority for this administration,” said HHS Deputy Secretary Eric Hargan of the rationale behind the regulatory review. “We need to change the healthcare system so that it puts value and results at the forefront of care, and coordinated care plays a vital role in this transformation.”

Nonetheless, the hospital sector has been generally supportive of regulatory changes. In testimony to a U.S. House Ways and Means subcommittee over the summer, Michael Lappin, chief integration officer at Advocate Aurora Health, observed that strict liability rules discourage value-based arrangements.

So, what would the healthcare delivery environment resemble with looser regulations governing both laws?

   According to Hardiman, the changes HHS is seeking to the regulations are far from sweeping.
“They are really on the margins, and they are not signaling a fundamental shift in the enforcement of the Stark and  Anti-Kickback Law,” he said. 

Why would there not be a major regulatory unraveling? Hardiman notes that doing so would create chaos in healthcare delivery. Moreover, qui tam(whistleblower) lawsuits in healthcare have become a major source of income for attorneys, and they would object to too much of an unwinding. Data from the non-profit watchdog organization Taxpayers Against Fraud bears that out: Of the more than $3.7 billion in False Claims Act settlements reached in 2017, $2.4 billion involved litigation involving healthcare enterprises. It was the eighth consecutive year that healthcare case settlements topped $2 billion. Hardiman also noted that more and more litigation is being settled for large sums even when the U.S. Justice Department declines to intervene in a case.

Hardiman believes that if the regs are loosened, they would likeliest be in the form of a “series of fraud and abuse waivers.” They would cover initiatives such as managed care ventures or ACOs, making it easier for hospitals and physicians to collaborate on care coordination, as well create models to more equitably share expenses and profits and encourage cross-referrals.

“You are going to see a much more comprehensive definition as to what types of risk-sharing arrangements will not be reviewed as renumeration under the kickback statute,” Hardiman said. “I wouldn’t be surprised to see safe harbors around Medicare Advantages, ACOs, and participants in other innovative risk-sharing arrangements.”

Individual physicians and medical groups may also have the opportunity to pay inducements to patients to lose weight or engage in another health-enhancing activity – something they are currently barred from doing under most circumstances.

“Everybody knows we’re heading toward a value-based coordinated care model,” Hardiman said. “And promoting and incentivizing it is still a risky business. You want at least some practical guideposts.” 

 

CMS seeks input on Stark Law changes amid value-based care shift

https://www.healthcaredive.com/news/cms-seeks-input-on-stark-law-changes-amid-value-based-care-shift/526239/

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Dive Brief:

  • The Centers for Medicare & Medicaid Services asked stakeholders Wednesday for input on how to change the Stark Law to allow for better care coordination and new alternative payment models or other novel financial arrangements.
  • The American Hospital Association has been vocal in pushing for changes to the physician self-referral law, calling it outdated. AHA argues the law presents “nearly impenetrable roadblocks in the move toward value-based care.”
  • The agency specifically is requesting input on what new exemptions to the Stark Law are needed to protect accountable care organization models, bundled payment models and other payment models, including how to allow coordination care outside of an alternative payment model. It also asks for help examining definitions for terminology such as risk-sharing, enrollee, gain-sharing and other terms.

Dive Insight:

The Stark Law, enacted in 1989, aims to cut down on financial incentives impacting physician care decisions. It prohibits certain Medicare-payable referrals to entities they have a financial or familial relationship with, and stops such entities from filing Medicare claims for referred services, unless exempted under certain instances.

CMS says that it is issuing the RFI in response to comments it has received that raised concern that the Stark Law is impeding participation in healthcare delivery and payment reform efforts.

“We are particularly interested in your thoughts on issues that include, but are not limited to, the structure of arrangements between parties that participate in alternative payment models or other novel financial arrangements, the need for revisions or additions to exceptions to the physician self-referral law, and terminology related to alternative payment models and the physician self-referral law,” the CMS notice states.

In a statement submitted by AHA to the House Subcommittee on Health of the Committee on Ways and Means, the group urged Congress to step in to change Stark Law to allow hospitals and physicians to more closely work together.

“Congress should create a clear and comprehensive safe harbor under the anti-kickback law for arrangements designed to foster collaboration in the delivery of health care and incentivize and reward efficiencies and improvement in care,” AHA said.  “In addition, the Stark Law should be reformed to focus exclusively on ownership arrangements. Compensation arrangements should be subject to oversight solely under the anti-kickback law.”

CMS Administrator Seema Verma appears to be sympathetic. In a Wednesday blog post, she said the Stark Law may be prohibiting value-based arrangements that HHS has made a priority to shift towards. Previously, Verma said that CMS was going to put together an inter-agency group to examine potential changes to the law.

“I think that Stark was developed a long time ago, and this gets to where we are going modernizing the program,” Verma told AHA President and CEO Rick Pollack during a webcast in January. “The payment systems and how we are operating is different, and we need to bring along some of those regulations and figure out what we can do. And I’m not sure that this is not going to require some congressional intervention as well.”

CMS is asking for comments to be submitted on the RFI by August 24.

 

Gut check: Change is coming, and healthcare executives don’t necessarily think it’s a bad thing

http://www.healthcarefinancenews.com/news/gut-check-change-coming-and-healthcare-executives-dont-necessarily-think-its-bad-thing

Self-Discovery

The future of healthcare policy is a bit murky these days. President-elect Donald Trump has pledged to repeal the Affordable Care Act, and the Republican-run U.S. Congress is already fast at work to make that happen.

What’s not known, however, is what will change for the thousands of U.S. healthcare businesses that have not only adapted to the ACA but also made millions in investments in areas such as electronic health records, value-based reimbursement and reporting to align with the policies of the outgoing administration.

Healthcare Finance spoke with several executives at healthcare businesses to get their perspectives on not only the changes they expect but also their thoughts on what the healthcare sector actually needs to do to provide the best care while still safeguarding the health of its business model.