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Analysis

What Can We Expect from Stark, Anti-Kickback Revisions?

By John Commins  
   August 13, 2020

The proposed reforms are now under review by the Office of Management and Budget.

Sweeping revisions of the Stark and Anti-Kickback statutes are expected to be unveiled soon as the federal government grapples with the shifting landscape of value-based care and industry consolidation.

Kathleen McDermott, a former U.S. assistant attorney, and now a partner at Washington, D.C.-based Morgan Lewis, offered some guidance on what to expect in this email exchange with HealthLeaders.

HL: When will this final rule be made public?

McDermott: Health and Human Services has suggested late August or early September 2020, though that projection may change. The regulations currently are under review by the Office of Management and Budget.

HL: Why are these revisions to Stark and Anti-Kickback needed?

McDermott: These statutes were enacted decades ago and were drafted with the older healthcare reimbursement systems in mind. The goal of these recent changes is to modernize the regulations implementing these laws to account for present risks and allow for innovation in value-based arrangements that involve clinical care coordination. Removing unnecessary regulatory barriers to clinical care coordination (in particular, by the strict liability Stark Law) should make our health system more efficient and our citizens healthier.

HL: What should we be looking for in this final rule?

McDermott: The core proposals regarding value-based arrangements should be confirmed with more regulatory details and reconciliation or harmonization of definitions that were left open in the proposed rule related to patient engagement tools and participation.

Notably, the rules introduced the concept of considering social determinants of health (nutrition, housing and transportation) for patient incentives and in the safe harbor for local transportation. This important concept could in the future open the door to a wide variety of non-medical services and arrangements to assure access to quality and coordinated care. We should also expect the implementation of several significant revisions to existing Stark Law regulations.

HL: Do you anticipate any significant changes in the final rule, compared with the proposal that was issued last fall?

McDermott: Yes, there were several areas that were left open for comment and may not result in a specific final rule.

HL: Will any of this require an act of Congress?

McDermott: Technically no, but some may argue that the regulatory changes go beyond the agency’s rule-making authority to interpret and implement a statute, such as changes to the definition of remuneration.

For example, some may argue that the anti-kickback safe harbors and Stark Law exceptions currently exceed statutory authority in some respects, but no one seems to be complaining in this regard. Nonetheless, we don’t anticipate this will impact the agency’s path to modernization.

HL: Is any significant opposition to these revisions? From whom? And what is the basis of their opposition?

McDermott: The whistleblower bar has raised concerns that modernizing the fraud and abuse laws may encourage more fraud and abuse. Whistleblowers bring cases for private gain and some of these changes may impact existing cases or cases that could have been brought under prior or superseded rules. Stark Law definitional changes to fair market value and commercial reasonableness could have a big impact on whistleblower cases based on regulatory violations.

HL: Are there any unintended consequences that could arise from this?

McDermott: This modernization effort is a leap of faith that healthcare providers can be incentivized to effectively coordinate good clinical care and patients will participate meaningfully in coordinated care activities to manage their health. There will be many unintended consequences, hopefully all good ones. 

HL: Will this accelerate the healthcare sector's general trend toward consolidation?

McDermott: At some level, yes, but the healthcare sector’s trend toward consolidation seems more often driven by factors other than regulatory requirements. Whatever is consolidated today will be unwound tomorrow, if history is any guide.

“This modernization effort is a leap of faith that healthcare providers can be incentivized to effectively coordinate good clinical care and patients will participate meaningfully in coordinated care activities to manage their health. There will be many unintended consequences, hopefully all good ones.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

The core proposals regarding value-based arrangements should be confirmed with more regulatory details and reconciliation or harmonization of definitions that were left open in the proposed rule related to patient engagement tools and participation.

Notably, the rules introduced the concept of considering social determinants of health (nutrition, housing and transportation) for patient incentives and in the safe harbor for local transportation.

This important concept could in the future open the door to a wide variety of non-medical services and arrangements to assure access to quality and coordinated care.

We should also expect the implementation of several significant revisions to existing Stark Law regulations.


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