Feds Reconsidering Stark and Anti-Kickback Safe Harbors

January 31, 2019

The concepts of the federal Stark Law and its companion Anti-Kickback Statute (AKS) are often used interchangeably by health care industry providers, though both laws are different in applicability.

A chart detailing the differences has been prepared by HHS and can be found here: https://oig.hhs.gov/compliance/provider-compliance-training/files/starkandakscharthandout508.pdf
Health & Human Services (HHS) and its Office of Inspector General (OIG) HHS has been taking comments from industry as to ways to “update” the rules implementing the Stark Law and the AKS to meet modern evolutions in physician/employee compensation and other financial arrangements which industry believes are outdated and stifle innovation.

According to recent reporting by ModernHealthcare.com:

“Hospitals have urged HHS’ Office of Inspector General to recognize that payments between providers in the same alternative pay models do not violate federal anti-kickback laws, warning they may not participate in the programs otherwise. Alternative pay models can violate anti-kickback laws because they can include incentives and shared savings payment agreements to reduce the cost of care, which could influence a provider to use a certain vendor, refer patients to specific facilities or order more services that are paid for by federal healthcare programs. But providers told the OIG that the laws are too broad and they’re getting in the way of the move to value-based care. Some providers called on the agency to create a so-called safe harbor for payments made between hospitals, physician groups and skilled-nursing facilities in value-based arrangements to allow them to split shared savings payments.”

Relevant to the addiction treatment industry was commentary about forms of “payments” to patients.

“Providers also want to protect payments to patients to address their social determinants of health. These payments may violate anti-kickback statute because a beneficiary could feel obligated to continue receiving care from that provider.  But patients are more likely to lose weight if they have a financial incentive, according to American College of Cardiology President Dr. Michael Valentine. If physicians can pay for food, clothing or even transportation to and from healthcare visits, that could improve patient health. Valentine called for an expanded safe harbor that would allow physicians to pay patients to improve their social determinants of health.  Karen Ali, general counsel at the New Jersey Hospital Association, agreed that OIG should not penalize hospitals for these payments, as they could reduce unnecessary readmissions. ‘Hospital responsibility for patient care no longer begins and ends at the hospital door,’ Ali said. The comments are in response to a Request for Information issued by HHS’ OIG this past summer. The agency asked providers how it could encourage value-based pay arrangements. It received more than 350 responses. The CMS is also looking to soften anti-kickback regulations. It issued its own RFI to determine how it can minimize the regulatory barriers around the so-called Stark law.”

At the local (Florida) level, and now at the federal level with the adoption of the new “Eliminating Kickbacks in Recovery Act” (EKRA), the importance of updates to the AKS is relevant for two main reasons:

  1. Florida’s Patient Brokering Act (PBA), s. 817.505, Fla. Stat., holds out as “defenses” anything that is deemed a “safe harbor” within the federal AKS (meaning, if HHS/OIG says a certain action does not violate the AKS, then Florida law says it also does not violate the PBA); and
  2. EKRA, which passed at part of the SUPPORT Act of 2018, does specifically include certain “safe harbors” but also explicitly contemplates that DOJ and HHS will adopt rules to further clarify those exceptions.

As proposed rules relaxing the AKS are rolled out, we will certainly keep everyone updated.  However, we continue to strongly believe (if not know) that any such benefit given to a patient with the intent to induce patronage will continue to be disfavored as being against public policy.

Jeffrey Lynne

Jeffrey Lynne

Jeffrey C. Lynne is a South Florida native, representing individuals and business entities relating to licensing, accreditation, regulatory compliance, business structure, marketing, real estate, zoning and litigation pertaining to substance abuse treatment facilities and sober living residences. Mr. Lynne has been recognized across the region as a leader in progressive public dialogue about the role that substance abuse treatment has within our communities and the fundamental need and right to provide safe and affordable housing for those who are both in treatment for addiction and alcoholism as well as those who are established in their recovery.
Jeffrey Lynne

About Jeffrey Lynne

Jeffrey C. Lynne is a South Florida native, representing individuals and business entities relating to licensing, accreditation, regulatory compliance, business structure, marketing, real estate, zoning and litigation pertaining to substance abuse treatment facilities and sober living residences. Mr. Lynne has been recognized across the region as a leader in progressive public dialogue about the role that substance abuse treatment has within our communities and the fundamental need and right to provide safe and affordable housing for those who are both in treatment for addiction and alcoholism as well as those who are established in their recovery.

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