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Proposed New Rules to the Anti-Kickback Statute and Stark Law Now Open for Comment

Posted on 10/22/19

On October 9, 2019, the Office of the Inspector General (OIG), along with the CMS and U.S. Department of Health and Human Services, proposed new rules to the Anti-Kickback Statute (“AKS”) and the physician self-referral law (“Stark Law”) as part of their “Regulatory Sprint to Coordinate Care”. The new rules are designed to reduce regulatory barriers and allow for a more efficient transformation to a value-based healthcare system that promotes care coordination.

Anti-Kickback Statute Proposed Rule

The “AKS” is a broad prohibition of exchange of anything of value for referrals and services that are payable by a federal healthcare program and applies to both payers and recipients of kickbacks.

Some highlights of the proposed new rule include:

  • Creating three new safe harbors that would protect certain value-based arrangements to foster better coordinated and managed patient care:
    • Care Coordination Arrangements to Improve Quality, Health Outcomes, and Efficiency
    • Value-Based Arrangements with Substantial Downside Financial Risk
    • Value-Based Arrangements with Full Financial Risk
  • Protection for certain tools and support given to patients that would improve health outcomes, quality, and efficiency of providing service.
  • Exceptions that would protect remuneration offered in connection with CMS-sponsored models (as defined in the proposed rule).
  • Protection for the donation of cybersecurity technology.
  • Adding flexibility to part-time and outcomes-based arrangements.
  • Expansion and modification of mileage limits in rural areas and for transportation related to patients discharged from inpatient facilities.
  • Related to electronic health record items and services, adding protections for cybersecurity technology, updating provisions regarding interoperability and removal of the sunset date.

Stark Law Proposed Rule

The “Stark Law” prohibits a physician from referring designated health services (“DHS”) to any entity with which he or she (or an immediate family member) has a financial relationship, which includes any direct or indirect ownership or investment interest.

A few points of interest of this proposed new rule include:

  • Four new exceptions for value-based arrangements and new defined terms, including value-based activity, value-based arraignment, value-based enterprise, value-based purpose, VBE participation, and target patient population.
  • Looking at excluding limited remuneration to a physician, where compensation agreements not exceeding an aggregate of $3,500 per calendar year, if other conditions are met, would not be viewed as a Stark violation.
  • Protecting arrangements involving the donation of certain cybersecurity technology.
  • Guidance and clarification of fundamental terminology and requirements, including redefining terms like commercially reasonable, fair market value, the volume or value standard, and the other business generated standard.

About the Author

Johna Kennedy-Preston

Kerkering, Barberio & Co.
1990 Main St., Suite 801
Sarasota, FL 34236
(941) 365-4617

Ms. Kennedy-Preston is a senior-level healthcare business operations consultant. She provides clients with expertise in revenue cycle management, coding education, managed care contracting, mergers and start-up ventures, Medicare recoupment and reporting issues, credentialing with insurance carriers and assistance with state and federal licensing. 

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