Editor’s note: The medical community received more than 600 pages of proposed regulations Oct. 9, in the form of two proposed rules from CMS and the Department of Health and Human Services. William Maruca, partner, Fox Rothschild, Pittsburgh, shared his summary of the proposed rules with Part B News.
It is provided here with his permission.
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As part of an effort entitled the Regulatory Sprint to Coordinated Care, CMS and OIG released advance copies of proposed regulatory changes on Oct. 9. The proposed rules would modify regulations that have presented obstacles to physicians, hospitals and other providers as they transition away from traditional fee-for-service (FFS) payment models toward value-based arrangements.
Historically, the FFS payment system has rewarded providers for the volume of services they perform or refer, not the outcome or quality of care. Driven by changes in the private insurance system, CMS and OIG are working toward facilitating new payment models, both private and government-based, that may have been stymied by prior regulatory risks.
The
Office of Inspector General (OIG) is proposing
new Safe Harbor exceptions under the Medicare and Medicaid Anti-Kickback statute (AKS), which generally prohibits the offer, receipt, solicitation or payment of any kickback or other remuneration in exchange for or to induce referrals under federal health programs. The proposed changes include:
- Three new safe harbors for certain remuneration exchanged between or among eligible participants: care coordination arrangements aimed at improving quality and outcomes; value-based arrangements with substantial downside financial risk; and value-based arrangement with full financial risk;
- Automatic safe harbors for any innovation models that are sponsored by CMS;
- New exception for cybersecurity technology and services;
- Making the existing safe harbor and exception for electronic health records (EHR) permanent;
- New safe harbor for providing certain tools and support to patients to improve quality, outcomes and efficiency;
- Expanding the existing safe harbor for local transportation; and
- New exception for telehealth technologies furnished to in-home dialysis patients.
Safe harbors protect parties to certain transactions from liability under the AKS, but failure to meet the terms of a safe harbor does not result in any presumption of illegality.
The OIG notes that these new rules need to guard against “traditional risks” of overutilization, inappropriate patient steering, unfair competition and poor-quality care, as well as new risks presented by value-based payment models, including stinting on care (underutilization), cherry picking lucrative or adherent patients, “lemon dropping” costly or noncompliant patients, and seeking incentives to manipulate or falsify data used to verify performance and outcomes for payment purposes.
The
Centers for Medicare and Medicaid Services (CMS), which interprets and enforces the physician self-referral statute known as the Stark Law, has proposed
additional exceptions and clarifications of current rules under that law as part of its “Patients Over Paperwork” initiative. Unlike the optional AKS Safe Harbors, parties to a transaction or relationship under which physicians make referrals for certain designated health services with which they have a financial relationship must meet a Stark exception to avoid liability.
The CMS proposal includes:
- New, permanent exceptions to the Stark Law for value-based arrangements, similar to those under the new AKS safe harbors, applicable to all patients, not just Medicare beneficiaries;
- Adding definitions for "Commercially reasonable," "Cybersecurity," "Isolated financial transaction," "General market value," "Target patient population," "Value-base activity," "Value-based arrangement," "Value-based enterprise (VBE)," "Value-based purpose" and "VBE participant";
- Revising the definition for "Electronic health record," "Fair market value," "Interoperable" and "Transaction";
- Modifying permissible productivity bonuses and profit shares within group practices;
- Modifying the indirect compensation exception; and
- Modifying the electronic health record exception.
Both agencies are seeking public input on these proposals during a comment period which will close 75 days after the publication of the proposed rules in the Federal Register.