In what may prove to be the most substantial fraud and abuse rulemaking in over a decade, the U.S. Department of Health and Human Services Office of Inspector General (“OIG”) and Centers for Medicare & Medicaid Services (“CMS”) published on November 20, 2020 long-awaited final rules changing the regulations addressing the Anti-Kickback Statute (“AKS”) and Civil Monetary Penalties for Beneficiary Inducements (“CMP”), and the Physician Self-Referral Law (the “Stark Law”), respectively. Both rules were part of the HHS Regulatory Sprint to Coordinated Care and are the culmination of a multi-year effort that began with CMS and OIG issuing requests for information in September 2018 and issuing proposed rules in October 2019 (as discussed in prior Health Law Pulse posts here and here). In a press release accompanying the final rules, HHS Secretary Alex Azar touted the final rules as “regulatory reforms [that] will mean better care, including innovative arrangements with digital technology that may help patients receive care during the COVID-19 pandemic.”
As foreshadowed in its Stark Law proposed rule, CMS finalized a three-tiered exception for value-based arrangements, providing greater flexibility for arrangements based on the level of risk being borne by the parties to the arrangement, i.e., full financial risk, meaningful downside financial risk, and care coordination arrangements with no or lower risk. In promulgating such an exception, CMS embraced the blunt criticism of commenters that “the current [Stark Law] prohibitions are . . . antithetical to the stated goals of policy makers . . . for health care delivery and payment reform.” CMS underscored that there are some differences between the Stark Law’s value-based exception and the corresponding AKS safe harbors promulgated in the OIG’s final rule.
Beyond the value-based exception, the Stark Law final rule includes other critical changes such as:
- Numerous definitional changes, reflecting refinements to the draft regulatory text of the proposed rule on critical definitions such as “commercially reasonable” and “fair market value;”
- Codifying what CMS views as a ‘bright-line test’ for CMS to deem that compensation “takes into account the volume or value of referrals,” which should offer greater assurance to providers in structuring arrangements that do not fail this test;
- Extending prior CMS guidance liberalizing the writing and signature requirements (as discussed in Health Law Pulse posts here (September 2015) and here (August 2018)), offering parties greater front-end flexibility in satisfying applicable exceptions;
- Amending the previously-gutted “payments by a physician” exception in a manner that should restore its usefulness; and
- Adding new exceptions for “limited remuneration to a physician” (with a $5,000 annual per-physician cap reflecting an increase from the proposed rule) and “cybersecurity technology and related services.”
The OIG’s final rule, in addition to the previously mentioned value-based arrangement AKS safe harbors, created new safe harbors for:
- Patient engagement and support;
- Cybersecurity technology and services arrangements;
- CMS-Sponsored Models;
- Telehealth technologies for in-home dialysis patients; and
- Medicare Shared Savings Program ACO beneficiary incentives.
Additionally, the final rule modifies the following existing AKS safe harbors:
- Local transportation;
- Electronic health records arrangements; and
- Personal service and management contracts.
The final rules are scheduled to be published in the Federal Register on December 2, 2020, and are generally slated to be effective on January 19, 2021.
Norton Rose Fulbright attorneys are further examining these final rules and will publish additional details and analysis shortly, including examples of arrangements that could be structured to satisfy the new exceptions, implications of the differences between the final rules in key areas such as the value-based arrangements guidance, and more. Stay tuned to the Health Law Pulse for our insights into these significant final rules and their implications for your organization.