CMS, OIG Final Rules to Reform Stark Law and Anti-Kickback Statute Regulations

Dec 22, 2020 at 12:59 pm by pj




The Centers for Medicare & Medicaid Services (CMS) and the Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued two highly anticipated final rules to reform the Stark Law and the Anti-Kickback Statute (AKS) regulations on November 20, 2020.


On November 20, 2020, HHS Secretary Alex Azar stated, “today, we’ve completed historic reforms to regulations that have stood in the way of creativity and innovation by American healthcare providers for far too long. These new regulatory reforms will mean better care, including innovative arrangements with digital technology that may help patients receive care during the COVID-19 pandemic.”


CMS and OIG emphasized that the final rules offer health care providers more flexibility to coordinate and improve care for patients, while maintaining important guardrails that prevent overutilization and fraud and abuse. The initiative is aimed at removing regulatory barriers that may hamper innovative arrangements for coordinating care consistent with a shift to a value-based health care system.


“OIG’s new safe harbor regulations are designed to facilitate better coordinated care for patients, value-based care, and improved cybersecurity, while also protecting against fraudulent or abusive conduct,” said Christi A. Grimm, Principal Deputy Inspector General. “Providers and the health care system are still on the front lines against COVID-19, and this rule establishes flexibilities for remote patient monitoring or other arrangements to assist in the ongoing response and recovery efforts.”


According to CMS, the Stark final rule creates new, permanent exceptions to the Stark Law for value-based arrangements. Theses exceptions will apply broadly to care provided to all patients, not just Medicare beneficiaries.


The 627-plus page final rule also includes additional clarifications and guidance on key issues in response to stakeholder comments. An example, the final rule provides guidance on how to determine if compensation meets the requirement that compensation provided to a physician by another health care provider generally must be at fair market value. CMS fact sheet states, the rule provides clarity and guidance on a wide range of technical compliance requirements intended to reduce administrative burden that drives costs up.


CMS’ fact sheet additionally states, the final rule includes new exceptions to provide protection for non-abusive, beneficial arrangements between physicians and other health care providers. These finalized exceptions provide new flexibility for certain arrangements, such as donations of cybersecurity technology that safeguard the integrity of the health care ecosystem, regardless of whether the parties operate in a fee-for-service or value-based payment system.


The 1000-plus page AKS final rule implements seven new safe harbors, four existing safe harbors, and codifies one new exception under the Beneficiary Inducements CMP.


Additionally, the final rule modifies and clarifies certain provisions in response to comments received on the proposed rule. For example, the rule clarifies how medical device manufacturers and durable medical equipment companies may participate in protected care coordination arrangements that involve digital health technology; lowers the level of “downside” financial risk parties must assume to qualify under the new safe harbor for value-based arrangements with substantial downside financial risk; and broadens the new safe harbor for cybersecurity technology and services to cover remuneration in the form of cybersecurity-related hardware according to CMS fact sheet.


These changes will be applicable in a number of settings including physician employment agreements, medical director agreements, EMR/HER contracts, independent contractor professional services agreements, hospital physician agreements, and other compensation arrangements involving physicians. Thus, if you have one of these agreements/contracts you should contact your attorney and have them reviewed.


Michael R. Lowe, Esquire is a Florida board-certified health law attorney at Lowe & Evander, P.A.  Mr. Lowe regularly represents providers, physicians and other licensed health care professionals, and facilities in a wide variety of health care law matters.

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