Stark, Anti-Kickback Statute Reform: 5 Things Healthcare Execs Need to Know

Oct 17, 2019

In a long-awaited move, HHS proposes to overhaul the federal anti-kickback statute and Stark Law for today’s value-based environment.

HHS recently announced a proposal to make alterations to regulations such as the Stark Law and the anti-kickback statute.

Jesse Neil, a healthcare attorney with Waller law firm, a top-10 national law firm, says there has been discussion of reforming these regulations in an evolving industry, amongst healthcare agencies, for some time.

As the healthcare industry transitions more into a value-based care environment rather than focusing on the volume of products purchased in the industry, “Over time, (the regulations have) become a barrier to providers to what today’s new environment is,” Neil says.

These ‘outdated’ laws are limiting the ability of providers to coordinate care effectively between physicians, hospitals, post-acute care institutions, and payers,” he says.

Commentary from numerous providers intended to be adopted by agencies into the new laws are currently being accepted during a 75-day period. The process of adopting proposals will carry into the following year, Neil says.

If proposals come into action, this could mean a number of different outcomes for healthcare providers, patients and the value-based industry.

“These are proposals, and we fully expect them to evolve before any updates are finalized. That said, if changes to Stark and the anti-kickback rules were implemented and providers are given room to collaborate across the care continuum more freely, patients could benefit in the form of higher quality, lower cost care,” says Venson Wallin, the national healthcare compliance and regulatory leader for BDO, a U.S. professional services firm providing assurance, tax, and advisory services to a wide range of publicly traded and privately held companies.

Related: The Future Of Stark Law

“On the provider side, the hospital is often the anchor of care,” Wallin says. “Other providers on the continuum who can show that they’d make a strong partner in a value-based arrangement and help hospitals provide higher quality care at lower costs, then, will thrive in this environment. From a broader health system perspective, these changes would allow the industry to deliver better coordinated care.”

Here are five things healthcare executive need to know about the reform of the Stark and anti-kickback statute, according to Neil, Wallin, and Rick Zall, partner and chair of Healthcare at international law firm Proskauer:

  • The proposed rule change is intended to remove uncertainty and barriers to participating in value-based care arrangements, including coordinated care efforts and taking on increased risk in order to deliver more cost effective and higher quality care. “Specifically, it is intended to clear up questions under existing guidelines about value-based care arrangements, associated referrals and reimbursements, and subsequent potential Stark Law or anti-kickback violations,” Zall says. 

  • There has long been tension between CMS policy goals and OIG watchdogs when it comes to referral practices under value-based care arrangements. “The rule is a positive development that will seek to define what activities will be sanctioned by CMS and OIG,” Zall says.

  • Providers should keep an eye on the important details to come. There are still critical nuances to be worked out about reimbursement levels and capping how much will be paid, according to Zall. “There will also be ongoing debates about whether the exemptions go far enough and what limits will remain in place,” he says.  

  • Providers should also be aware of some softening of safe harbors as it relates to technology software and services. “The proposed rule seeks to ease regulations about how providers can make EHRs available to doctors in order to be more expansive and encourage adoption,” Zall says.

  • These proposals are to reduce regulations. “By alleviating some of the regulatory and compliance concerns providers have had to navigate to participate in value-based arrangements, the proposed CMS and HHS changes would clear the path and incentivize more providers to enter into such arrangements,” Wallin says. “However, while the proposed overhauls may protect certain value-based arrangements from penalties, providers should expect regulators’ focus on referral monitoring, quality metrics reporting, and price transparency to continue.”

Briana Contreras is associate editor of Managed Healthcare Executive.

 

 

 

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