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The Newest Proposed Changes to The Stark Law And The Anti-Kickback Statute

Wednesday, August 19th, 2020
doctor with one blue glove making note

The Department of Health and Human Services Office of Inspector General (OIG) and the Centers for Medicare & Medicaid Services (CMS) announced proposed changes to the Stark Law, Anti-Kickback Statute, and Civil Monetary Penalty Law in 2019. The changes clear up issues with the Stark Law and Anti-Kickback Statute as well as offer new exceptions and safe harbors. They would also help protect healthcare organizations working in value-based arrangements focused on coordinated care. Here is some important information to know about the proposed changes.

The Anti-Kickback Statute

For this law, the OIG proposed both modifications to current safe harbors and to introduce new safe harbors. These promote payment arrangements that reward positive outcomes for patients. There are six new safe harbors that have been proposed as well as modifications to increase protections under the Anti-Kickback Statute and the Civil Monetary Penalty Law.

For example, the CMS-Sponsored Models safe harbor would protect arrangements between parties to CMS models, like the Innovation Center model, using existing waivers instead of needing a fraud and abuse waiver for every CMS model. One of the proposed modifications would impact the Personal Services and Management Contracts safe harbor to add flexibility for outcome-based payments under service contracts instead of requiring aggregate compensation to be fixed in advance. The goal of all the proposed changes is to ease the restrictions within the industry that impede providers from caring for their patients, but there are limitations. For instance, the new safe harbors for “Value-Based Enterprises” would not apply to the following entities.

  • Pharmaceutical manufacturers;
  • Manufacturers, distributors, and suppliers of durable medical equipment, prosthetics, orthotics, or supplies (DMEPOS); and
  • Laboratories.

Physician Self-Referral (Stark) Law

CMS proposed a change to the Stark Law regulations to help modernize and clarify the law. These changes would also create new and modify existing exceptions for healthcare organizations that participate in value-based arrangements. As with the proposed changes to the Anti-Kickback Statute regulations, CMS has proposed that its new Stark Law exceptions for Value-Based Enterprises would not apply pharmaceutical manufacturers; manufacturers and distributors of DMEPOS; pharmacy benefit managers; wholesalers; and distributers.

Price transparency is something that CMS cares about in normal circumstances as well as their proposed changes to the Stark Law. The freedom of choice and price information could be translated to coordinated care and value-based arrangements.

As part of their proposed changes, CMS suggested new exceptions for cybersecurity donations and for limited physician compensation. They also proposed modifications to the current exception for electronic health records as well as various compensation exceptions.

What would be the impact of the changes?

The impacts of these changes would first and foremost allow physicians and other healthcare providers to offer better, more coordinated care. They would also require everyone involved to stay updated with the changes. This could mean more time spent researching and learning, rather than serving patients.

Want to learn more about the Stark Law or Anti-Kickback laws?

At Brown & Fortunato, we know how difficult it can be to run your business and serve patients while staying compliant with government regulations. Our Healthcare Law attorneys are prepared to assist you in doing this so you can be successful. To learn more, call us at (833) 228-6300 or Send us an email.