AACU News & Notes

HHS Finalizes Rules Modernizing Stark Law & AKS

posted: November 30, 2020

Changes reflect shift toward coordinated, value-based care

On November 20, the U.S. Department of Health and Human Services, through CMS and the Office of Inspector General (OIG), issued two long-awaited Final Rules that represent the most significant changes to the Stark Law and the Anti-Kickback Statute (AKS) in decades.

The reforms are designed to reduce regulatory barriers to care coordination and support value-based care – goals the AACU has long championed. In 2018, when CMS requested information regarding the physician self-referral law, AACU submitted a comment letter outlining how the law should be reformed. In 2019, AACU responded to a CMS request regarding regulatory burdens and again highlighted the unnecessary roadblocks created by the Stark law.

The final rules clarify CMS and OIG interpretations of existing regulations and include significant changes to the fraud and abuse regulations that impact certain healthcare financial arrangements. The rules provide a framework for protecting value-based arrangements (VBAs) that incentivize care coordination, quality of care, and cost containment.

The Stark Law Final Rule establishes a series of new, permanent exceptions to Stark’s self-referral prohibitions that will apply regardless of whether a VBA relates to care furnished to Medicare beneficiaries or other patients:

  • Exceptions that will permit healthcare providers to design and enter into value-based arrangements
  • Exception for certain arrangements under which a physician receives limited remuneration for items or services actually provided by the physician
  • Exception that provides protection for certain beneficial arrangements between physicians and other healthcare providers (e.g. donations of cybersecurity technology)
  • Removes the sunset date that currently applies to the electronic health records (EHR) exception

The final rule also clarifies the definition of the “fair market value” requirement, an issue AACU has consistently raised in order to make it easier for physicians to ensure they are complying with the law. There are several other technical updates to Stark, many of which seek to reduce administrative burden so that physicians can spend more time on patient care.

The AKS Final Rule implements new safe harbors, modifies existing safe harbors, and codifies one new exception to the civil monetary penalty law that prohibits inducements to beneficiaries.

  • Three new safe harbors for value-based arrangements to foster better coordinated and managed patient care:
    1. Care coordination arrangements
    2. Value-based arrangements with substantial downside financial risk
    3. Value-based arrangements with full financial risk
  • Two additional value-based arrangement safe harbors:
    1. Patient Engagement and Support for a provider’s furnishing of certain tools and supports to patients to improve quality, health outcomes and efficiency
    2. CMS-Sponsored Models for remuneration provided in connection with CMS-sponsored payment models
  • Modifies the electronic health records safe harbor, personal services and management contracts safe harbor, warranty safe harbor, and local transportation safe harbor in order to extend, expand or provide more flexibility under the carve-outs
  • Codifies a statutory exception to the definition of remuneration under AKS related to Accountable Care Organization Beneficiary Incentive Programs

The AACU strongly supports these final rules to modernize the physician self-referral law and anti-kickback statute. The reforms will create greater clarity and protections for healthcare providers, and remove barriers to collaborative and innovative care. The final rule changes go into effect on January 19, 2021, with one exception on the Stark Law’s definition of group practice, which takes effect January 1, 2022.

Final Physician Self-Referral Law Rule:

CMS Final Rule (CMS-1720-F)
CMS Fact Sheet
CMS Press Release (Nov. 20, 2020)

Final AKS Rule and Beneficiary Inducements:

OIG Final Rule
OIG Fact Sheet
OIG chart (Eligible safe harbors)

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