Birmingham Medical News: CMS and OIG Issue Proposed Changes to the Stark, Anti-Kickback Statute and Beneficiary Inducement Civil Monetary Penalty Law

Articles / Publications

Reprinted with permission from the Birmingham Medical News

On October 9, 2019, the Centers for Medicare and Medicaid Services (CMS) and Department of Health and Human Services Office of Inspector General (HHS-OIG) issued proposed changes to the Physician Self-Referral Law (Stark Law), the Federal Anti-Kickback Statute (AKS) and the Beneficiary Inducement Civil Monetary Penalty (CMP) law. Each proposed rule is rather lengthy, so this article will simply summarize the proposed changes to the AKS and CMP law. Both CMS and the OIG issued fact sheets relating to their respective proposed rules to summarize the changes. The CMS fact sheet describing the proposed changes to the Stark Law is located on CMS’ website. The OIG fact sheet describing the proposed changes to the AKS and CMP Law is located on the OIG’s website.

As background, the AKS provides for criminal penalties for whoever knowingly and willfully offers, pays, solicits, or receives remuneration to induce or reward the referral of business reimbursable under any of the Federal health care programs. Healthcare providers and others may comply with statutory and regulatory safe harbors so that they have some confidence that their business practices will not be subject to any AKS enforcement action.

The CMP law provides for the imposition of CMPs against any person who offers or transfers remuneration to a Medicare or State healthcare program beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of any item or service for which payment may be made, in whole or in part, by Medicare or a State healthcare program. The CMP law contains several exclusions from its definition of “remuneration” that effectively allow the provision of certain services or benefits to beneficiaries without violating the CMP law.

According to the OIG, the broad reach of the AKS and the CMP for beneficiary inducements potentially inhibits beneficial arrangements that would help advance the transition to value-based care arrangements and improve the coordination of patient care among providers and payors. As a result, the OIG proposed changes to the AKS and CMP law to include: six new AKS safe harbors (three of which are for value-based arrangements), modifications to four existing AKS safe harbors, a codification of the statutory exception to the AKS definition of “remuneration” related to ACO Beneficiary Incentive Programs for Medicare Shared Savings Programs and an amendment to the definition of “remuneration” in the CMP rules related to an exception for telehealth technologies furnished to certain in-home dialysis patients.

The three value-based safe harbors specify remuneration exchanged between or among eligible participants in value-based arrangements that are designed to foster better coordinated and managed patient care. These three new safe harbors are Care Coordination Arrangements to Improve Quality, Health Outcomes, and Efficiency, Value-Based Arrangements With Substantial Downside Financial Risk, and Value-Based Arrangements With Full Financial Risk.  These proposed safe harbors vary by the types of remuneration protected, level of financial risk assumed by the parties, and types of safeguards included as safe harbor conditions.

Another proposed new safe harbor will protect certain donations of cybersecurity technology and services. Cybersecurity in this setting means the process of protecting information by preventing, detecting and responding to cyberattacks.  Technology means any software or other types of information technology other than hardware.  Under the proposal, the definition of “remuneration” does not include the provision of non-monetary items consisting of certain types of cybersecurity technology and services.  All of the following requirements must be met: the technology or services are necessary and used predominately to implement or maintain effective cybersecurity; the donor does not directly take into account the volume or value of referrals between the parties when determining the eligibility of the potential recipient or the amount or nature of the technology donated; the donor does not condition the donation on future referrals; the recipient does not make the receipt of the technology a condition of doing business; and the terms of the arrangement are set out in writing.

Other proposed changes include modifications to the existing safe harbor for Electronic Health Records Items and Services. These changes are added to protect certain related cybersecurity technology, to update provisions regarding interoperability, and to remove the sunset date.

The OIG also made changes to the existing safe harbor for personal services and management contracts.  The intent is to add flexibility with respect to outcomes-based payments and part-time arrangements.  The changes allow for such payments as long as numerous requirements are met.

The OIG also proposed changes to the local transportation safe harbor. The proposed modifications to the existing safe harbor expands the mileage limits for rural areas to 75 miles and allows transportation for patients discharged from inpatient facilities to the patient’s residence or residence of another.  The changes include definitions of “rural area,” “urban area,” and “shuttle service.”

The changes to the CMP law include changes to the definition of “remuneration” related to telehealth for in-home dialysis patients. The OIG proposed to exclude from the meaning of “remuneration” the provision of telehealth technologies if they are furnished to the individual with end state renal disease.  The definition of telehealth technologies means multimedia communications equipment that includes, at a minimum, audio and video equipment permitting two-way, real-time interactive communication between the patient and the distant site physician or practitioner used in the diagnosis, intervention, or ongoing care management between a patient and the remote healthcare provider. Telephones, facsimile machines, and electronic mail systems are not considered telehealth technologies. The provision of telehealth technologies is permitted if (1) provided by the provider of services or a renal dialysis facility, (2) the telehealth technologies are not offered as part of any advertisement or solicitation, (3) the technology contributes substantially to the provision of telehealth services, are not of excessive value, and is not duplicative of other technology the beneficiary already has, and (4) Federal health care programs, other payors or individuals are not billed for the technologies and there is no cost shifting to the Federal health care programs, payors or individuals.

The OIG is soliciting public comments to the proposed changes. Comments are due 75 days from the date of publication of the proposed rules in the Federal Register.  Comments may be sent electronically, by regular, express or overnight mail or by hand or courier.

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