New Stark Law Exception and Anti-Kickback Statute Safe Harbor Aim to Combat Physician Burnout

Health care professionals have faced increasing burnout and mental health issues in the wake of the COVID-19 pandemic.

In an effort to address these rising issues, Congress passed the Dr. Lorna Breen Health Care Provider Protection Act[1] in March 2022, named after Lorna Breen, M.D., an emergency room physician who died by suicide after treating sick and dying patients on the front lines of the pandemic. The Act authorizes the U.S. Department of Health and Human Services to award grants to health care entities to provide evidence-based programs aimed at improving the mental health and resilience of health care professionals.[2]

In line with the Lorna Breen Act, Congress passed the Consolidated Appropriations Act of 2023 (CAA) in December 2022, which included a new Stark Law exception and an Anti-Kickback Statute (“AKS”) safe harbor to permit health care entities (specifically hospitals, ambulatory surgical centers, community health centers, rural emergency hospitals, rural health clinics or skilled nursing facilities) to provide wellness programs to assist physicians and other clinicians seeking help for their mental health.[3]

The Stark Law (or Ethics in Patient Referrals Act)[4] is a civil law that prohibits physicians from referring patients for certain designated health services paid by Medicaid or Medicare to entities with which the physician or his or her immediate family member has a financial relationship (unless such financial relationship meets a specified exception). The Anti-Kickback statute[5] prohibits all medical providers, not just physicians, from knowingly and willfully paying or receiving kickbacks, remunerations or anything of value in exchange for referrals of patients who will receive treatment paid for by government health care programs including Medicare and Medicaid.

Wellness programs offered by a health care entity to providers could potentially violate the Stark Law and AKS. For example, if a hospital provides counseling services to a physician through a wellness program, the physician is receiving something of value from the hospital, which may be considered remuneration under the AKS or create a financial relationship under Stark Law. [6]  Under the Stark Law and AKS, the benefit created by the counseling services could arguably induce the physician to refer their patients to that hospital.

However, both the Stark Law and the AKS specify exceptions or safe harbors that permit certain business arrangements between providers and health care entities if they meet specific criteria. The new Stark Law exception and AKS safe harbor established in the CAA will help remove barriers for health care entities to provide physician wellness programs without running into issues under the federal fraud and abuse laws.

Key Requirements of the Stark Law Exception and AKS Safe Harbor

The Stark Law exception requires that health care entities make their physician wellness program available to all physicians who practice in the geographic area served by the provider, not just physicians who are a member of the entity’s medical staff or hold clinical privileges. Further, because the AKS applies to all health care providers, not just physicians, the new safe harbor adds that the program must be made available to all physicians and other clinicians who practice in the geographic area. Also, the new exemptions require that the program is offered to all physicians (and, under the AKS, including other clinicians) without regard to the volume or value of referrals or other business generated by the provider for the entity.

Additional key requirements for physician wellness programs to meet both the Stark Law exception and the AKS safe harbor are identical, and include that the program must:

  • Be made available for the primary purpose of preventing suicide, improving mental health and resiliency or providing training in appropriate strategies to promote mental health and resiliency
  • Be set forth in a written policy that includes an estimation of the cost of the program, the content and duration of the program, the evidence-based support for the program’s design, the personnel conducting the program and the method for evaluating the success of the program
  • Consist of counseling, mental health services, a suicide prevention program or a substance use disorder prevention and treatment program

The new Stark Law exception and AKS safe harbor provide an additional mechanism for health care entities to address burnout and mental health issues within their provider populations. Furthermore, regulations pertaining to these new statutory exceptions may come in the summer or early fall, which may provide additional requirements or additional guidance on these programs.

[1] 42 U.S.C. §§ 294n – 294t.

[2] See 42 U.S.C. § 294t. “Health care entities” under Section 294t mean entities that “provide health care services, such as hospitals, community health centers, and rural health clinics, or to medical professional associations.”

[3] See 42 USC § 1395nn(e)(9) for Stark Law exception and 42 U.S.C. § 1320a-7b(b)(3)(L) for Anti-Kickback Statute safe harbor.

[4] 42 USC § 1395nn.

[5] 42 U.S.C. § 1320a-7b.

[6] Both “remuneration” under the AKS and “financial relationship” under Stark Law are construed broadly in the statutes to encompass a wide variety of benefits that could occur in a transaction or agreement between health care providers and their employers.