Highlights from Stark Law and Anti-Kickback Statute Final Rules

On December 2, 2020, the Department of Health and Human Services (HHS), via the Centers for Medicare & Medicaid Services (CMS) and Office of Inspector General (OIG), formally published long-awaited final regulations aimed largely at modernizing and clarifying various aspects of the Stark Law, Anti-Kickback Statute and Civil Monetary Penalty Law. With one exception, as noted below, the new rules will generally take effect on January 19, 2021.

The full text and preamble of the final Stark Law regulations can be found here. The full text and preamble of the final Anti-Kickback Statute and Civil Monetary Penalty Law regulations can be found here.

The most noteworthy changes to the Stark Law and Anti-Kickback Statute rules involve new exceptions/safe harbors (and modifications of existing definitions, exceptions and safe harbors) to promote flexible engagement in “value-based activities” through “value-based enterprises” in furtherance of care coordination and quality improvement goals. Much time and attention should and will be devoted to these value-based arrangement changes (through future blog posts and other alerts). However, the purpose of this initial summary is to highlight the various other changes and updates that were adopted. Therefore, below is a high level outline of certain other significant changes to the Stark Law, Anti-Kickback Statute and Civil Monetary Penalty Law.

Highlights from Stark Law Changes:

  • Various definitional updates:
    • New definition for “commercially reasonable” added
    • New definition for “cybersecurity” added
    • Update to “designated health services” (DHS) definition to exclude certain inpatient services reimbursed under prospective payment systems (PPS)
    • Expansion of “fair market value” definition to address various contexts (e.g., space leases, compensation, equipment leases, etc.)
    • Clarification on applying the “indirect compensation” definition
    • Update to “interoperable” definition
    • Examples under the “isolated financial transaction” definition
    • Updates to “set in advance” definition to allow for subsequent modifications
    • Revised “remuneration” definition to remove the exception for surgical devices, items and supplies
    • Expanded explanations and examples related to applying “volume or value” of DHS referrals or other business generated
    • Various new definitions to address new value-based exceptions
  • Change to “group practice” definition clarifying the permissibility of profit-sharing in connection with value-based enterprise participation and the impermissibility of sharing DHS profits on an individual service basis
    • To become effective January 1, 2022
  • Removal (in various instances) of requirement under certain Stark Law exceptions that the arrangement or parties comply with the Anti-Kickback Statute
  • Updates to the lease exceptions to clarify “exclusive use” requirements where concurrent use is involved
  • New exceptions to “ownership or investment interests” for titular ownership interests and interests related to employee stock ownership plans (ESOPs)
  • Expansion of electronic health records (EHR) exception to cover cybersecurity software and services and removal of the 2021 sunset provision
  • New exception for certain “limited remuneration” to a physician (i.e., less than $5,000, as adjusted)
  • Updated grace period rules for compliance issues cured within 90 days of expiration of a compensation arrangement
  • Clarification of the acceptability of electronic signatures in satisfaction of signature requirements
  • Changes to the “fair market value compensation” exception to apply to certain leasing/rental arrangements
  • Several new value-based arrangement exceptions facilitating valued-based healthcare delivery and payment, applicable to:
    • Full financial risk for the value-based enterprise
    • Meaningful downside financial risk to the physician
    • Value-based arrangements generally (assuming various conditions are met)
  • New exception for the donation of cybersecurity technology and related services

Highlights from Anti-Kickback Statute Changes:

  • New safe harbor for certain point-of-sale (POS) price reductions for prescription pharmaceutical products by a manufacturer to a Medicare plan sponsor or Medicaid managed care organization
  • New safe harbor for certain payments/service fees made by a pharmaceutical manufacturer to a pharmacy benefit manager (PBM)
  • New safe harbor protecting the provision of patient engagement tools or supports provided by value-based enterprise participants to patients in order to improve quality, health outcomes and efficiency
  • Several new safe harbors for value-based arrangements, including:
    • Certain arrangements and exchanges of remuneration between value-based enterprises and participants in order to improve quality, health outcomes and efficiency
    • Certain arrangements and exchanges of remuneration between value-based enterprises and participants involving substantial downside financial risk
    • Certain arrangements and exchanges of remuneration between value-based enterprises and participants involving full financial risk
  • New safe harbor for certain remuneration among parties participating in CMS-sponsored models
  • New safe harbor protecting certain full or partial donations of cybersecurity technology and related services
  • New safe harbor applicable to incentive payments made by an accountable care organization (ACO) to an assigned beneficiary under a beneficiary incentive program
  • Changes to the personal services and management contracts safe harbor to remove the part-time schedule detail requirement and to cover certain outcomes-based payment arrangements (among other changes)
  • Changes to the warranty safe harbor to address protection for certain “bundled warranties” (among other changes)
  • Changes to the EHR safe harbor to remove the 2021 sunset provision and expressly cover cybersecurity technology donations (among other changes)
  • Changes to the local transportation safe harbor to loosen the mileage limitation for certain inpatient discharges (among other changes)

Highlights from Civil Monetary Penalty Law Changes:

  • New exclusion/exception from the definition of “remuneration” (for purposes of the beneficiary inducement prohibition) covering the provision of telehealth technologies by certain providers to patients with end-stage renal disease (ESRD) receiving home dialysis

As stated above, in future blog posts we will aim to take a deeper dive into the more pertinent changes to the Stark Law, Anti-Kickback Statute and Civil Monetary Penalty Law. Stay tuned.

Print
Close