Days after the proposed rule was released, Deputy Secretary Eric Hargan discussed what the policy will mean for provider organizations.
Department of Health and Human Services (HHS) Deputy Secretary Eric Hargan said that the proposed overhaul of the Stark Law and Anti-kickback Statute will incentivize healthcare providers to embrace value-based care arrangements.
The proposed rule, which was released Wednesday, would create exceptions to Stark Law for value-based arrangements and encourage physicians to be innovative in their approaches to care coordination without fear of violating the law.
The policy was first established in 1989 to prevent physician self-referrals.
In an interview with HealthLeaders, Hargan said that hospitals and health systems will now have the freedom to create a value-based enterprise for targeted patient populations with the goal of improving outcomes.
"Providing incentives, in many cases before, had been prevented because of these laws," Hargan said. "We think that to get to value-based care, we have to allow people to produce value in the system. The more risk you're willing to take in this tiered-structure, then the more flexibility you have to do things like gainsharing and providing in-kind contributions of services or items."
Related: HHS Delivers Long-Awaited Stark Law Regulatory Overhaul
Earlier this year, both Hargan and Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma had publicly stated a desire to loosen the Stark Law and requested comments from industry stakeholders about what could be included in the proposal.
Hargan said the CMS rule included strong feedback from provider organizations, especially as it related to definition of terms.
He highlighted the inclusion of three 'building block regulations,' such as definitions for what is commercially reasonable, fair market value, and the volume and value of referrals.
Related: Stark Law Comments Focus on Value-Based Arrangements
Despite soliciting advice from provider organizations on changes to the law, Hargan said it was important for HHS to maintain certain guardrails to avoid the influx of fraud, waste, and abuse.
"We have added in tiers of risk and limitations on the in-kind contributions for patient engagement and support," Hargan said. "We put [these guardrails] in place to make sure people realize that, at some point, they're going to have to justify their use of these safe harbors."
Related: Early Reviews Positive for Proposed Stark Law, Anti-kickback Revamps
As it relates to the operational side of health systems, Hargan said he believes the new rules would allow organizations to "coordinate without consolidating."
Hargan said he sees this as an opportunity for hospitals to work with entities across the sector, including independent physicians groups, diabetes care management companies, and home health agencies.
He added that HHS did not want to set a mandate for a particular result aside from bolstering patient care outcomes and creating a new structure for innovation among clinicians.
Related: At Brookings Institution, Deputy HHS Secretary Hargan Talks Stark Law, Kickbacks
In a speech earlier this year, Hargan said the move to value-based care required a "radical reorienting," which included changes to the Stark Law among other proposals.
Looking ahead, Hargan added that the agency's proposed interoperability rules will be another element of that "radical reorienting," prompting a shift in health technology and patient access to health records.
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.
Photo credit: WASHINGTON, DC - JANUARY 12, 2019: DEPARTMENT OF HEALTH AND HUMAN SERVICES sign at headquarters building. - Image / Editorial credit: Jer123 / Shutterstock.com