By: Anthony Romano with Burr Forman
On November 20, 2020, the Centers for Medicare & Medicaid Services and the Office of Inspector General of the Department of Health and Human Services issued two significant final rules to reform the Anti-Kickback Statute and Stark Law in an aim to reduce regulatory barriers to coordination of patient care, and to accelerate the transformation of the health care system to value-based care (a value-driven health care system that pays for health and outcomes, as opposed to the traditional fee-for-service payment system which rewards providers for the volume of care provided).
The 1,000-page Anti-Kickback Statute final rule does this by implementing seven new safe harbors, modifying four existing safe harbors, and codifying one new exception under the Civil Monetary Penalty Law. As you are probably aware, the Federal Anti-Kickback Statute provides for criminal penalties for whoever knowingly and willfully offers, pays, solicits, or receives remuneration to induce or reward, among other things, the referral of business reimbursable under any of the Federal health care programs, including Medicare and Medicaid. Health care providers and others may voluntarily seek to comply with statutory and regulatory safe harbors so that they have the assurance that their business practices will not be subject to sanctions under the Anti-Kickback Statute. To receive safe harbor protection, an arrangement must squarely meet each requirement of an applicable safe harbor. However, failure to fit in a safe harbor does not mean that an arrangement violates the Federal Anti-Kickback Statute. Arrangements that do not fit in a safe harbor are analyzed on a case-by-case basis, including whether the parties had the requisite intent. Congress intended the safe harbor regulations to be updated periodically to reflect changing business practices and technologies in the health care industry, and the new final Anti-Kickback Statute regulations accomplish this by, among other things, removing potential barriers to more effective coordination and management of patient care, and by removing potential barriers to the delivery of value-based care.
The 627-page Stark Law final rule creates new exceptions for value-based arrangements, provides additional guidance to make it easier for physicians and other health care providers to comply with the Stark Law, and provides protection for non-abusive, beneficial arrangements. Unless otherwise specified in the rules, the new provisions go into effect January 19, 2021. When the Stark Law was enacted in 1989, healthcare was paid for primarily on a fee-for-service basis and the Stark Law recognized that a profit motive could influence some physicians to order services based on their financial self-interest rather than the good of the patient. For this reason, the Stark Law prohibits a physician from making referrals for certain healthcare services payable by Medicare or Medicaid if the physician (or an immediate family member of the physician) has a financial relationship with the entity performing the service. There are statutory and regulatory exceptions, but in short, a physician cannot refer a patient to any entity with which he or she has a financial relationship unless an exception is satisfied. The Stark Law also prohibits the entity from filing claims with Medicare or Medicaid for services resulting from a prohibited referral, and Medicare or Medicaid cannot pay if the claims are submitted. Although the regulations that interpret the Stark Law have been updated several times, the Stark Law has not been significantly updated since it was enacted in 1989, and all previous changes left in place a framework that is tailored to a fee-for-service environment. The new Stark Law final rule includes a comprehensive package of reforms to modernize the regulations that interpret the Stark Law while continuing to protect the Medicare program and patients from bad actors.
Overall, these new rules will have a significant, and expected positive, impact on healthcare providers by easing burdensome regulatory restrictions. With over 1,600 pages of new rules to digest, be on the lookout for more detailed and specific analysis in the near future. In the meantime, please do not hesitate to contact us if you have specific questions regarding the impact of the new Anti-kickback Statute or Stark Law final rules on you or your practice.
Anthony Romano practices with Burr & Forman LLP in the firm’s Health Care Industry Group. Anthony may be reached at firstname.lastname@example.org or (205) 458-5210.