HHS announces proposed changes to laws to support value-based care

Susie BaficoValue-based Care

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This week the Department for Health and Human Services (HHS) announced proposed rules that would update and clarify regulations for the Stark Law and the anti-kickback statute. HHS has acknowledged the rules as they currently stand were developed in a fee-for-service healthcare landscape, and they must be modified to fit the shift to value-based arrangements. 

The Stark Law

When the Stark Law was implemented, the healthcare landscape was deeply set in the fee-for-service model. That’s why this law focused on ensuring providers would not make decisions based on profit. The Stark Law prohibits providers from referring Medicare beneficiaries for certain services if they have a financial connection to the entity that provides the service. 

While this is an important rule, the shift toward value-based arrangements started to blur the line. Some providers may have chosen not to enter value-based agreements due to concerns over civil penalties for even unintentionally violating the law. From the initial request for comment, organizations told the Centers for Medicare and Medicare Services (CMS) that they have to invest a significant amount of money to understand and comply with the Stark Law. 

The proposed changes to the Stark Law include permanent exceptions for value-based arrangements. CMS stated that legitimate activities to coordinate and improve the quality of care for patients under a value-based agreement between providers and healthcare facilities would not be penalized. This ruling would apply to providers with Medicare and non-Medicare patients. CMS also includes more guidance on key requirements of the law in an attempt to make it simpler for practices to understand and comply with the law. 

The Anti-Kickback Statute

The federal anti-kickback statute is a law that prohibits providers from knowingly and willfully offering, paying, soliciting, or receiving remuneration to induce or reward the referral of services under federal health programs like Medicare and Medicaid. Violation of this law would result in criminal penalties. While an important law, HHS announced the need to revise the law to allow for care coordination that happens in value-based care, such as arrangements that involve taking on downside financial risk or those the reimburse based on quality, health outcomes, and efficiency. 

HHS proposed several changes to regulations to allow providers to engage in value-based care. Multiple new safe harbors were proposed to accommodate value-based care. It has been thought that the anti-kickback statute has unnecessarily limited the ways healthcare providers can coordinate care for patients. The new safe harbors make it easier for healthcare providers to comply with the law because of the increase in value-based care specific safe harbors. The new safe harbors cover value-based arrangements, CMS-sponsored models, patient engagement, ACO programs, outcomes-based payments, and more. 

Initial Reactions

Community Oncology Alliance (COA) released a statement saying they were pleased with the reforms as a positive first step. Providers will still need clear guidance and eventually the regulations will need to be completely overhauled, according to COA’s statement. The American Medical Association was still reviewing the proposed rule but applauds that the administration has acknowledged the need for reform. However, the Medical Group Management Association said the changes have not fixed the fundamental problems they have with the law. 

Both rules will be published officially on October 17, 2019, and the comment period will remain open for 75 days. Read the proposed rule for the Stark Law and the Anti-Kickback Statute.