Last month, the Centers for Medicare & Medicaid Services (CMS) released proposed changes to the Stark Law and Federal Anti-Kickback Statute. Among the goals of the proposed changes are supporting value-based and coordinated care initiatives and modernizing the law and statute in the process.
Yet, some fear the changes will mean more compliance pains and increased financial pressure for smaller healthcare entities. The changes call for complete or partial risk on the part of providers, and while this is the type of change policymakers believe is needed to move the healthcare economy from volume-based to value-based, it could mean major challenges for some providers. Consider the following questions with regard to the proposed changes.
Will the new rules improve care?
The proposed rules call for providers and stakeholders to work together in the coordination of care, and they provide more flexibility for providers to share cost savings and develop innovative risk-sharing models.
Under current Stark Law, physicians are banned from referring patients to facilities in which they have a financial stake unless a specific exception applies. The proposed changes to the law would expand the activities that can meet an exception in order to protect legitimate value-based arrangements from penalties.
Additionally, the changes put an emphasis on cybersecurity resources and technology and set out rules regarding when it is appropriate to donate cybersecurity technology. As described by CMS Administrator Seema Verma in an Oct. 9 article in FierceHealthcare: "A hospital that wants to protect electronic health records and other data may be worried about providing cybersecurity software to physicians for free or reduced cost due to the Stark Law. Our proposed rule would allow for such a common-sense arrangement while ensuring physicians won't be obligated to make referrals."
Expanding the circumstances in which sharing cybersecurity resources and technology meet a safe harbor will not only improve care coordination and the sharing of health data now, but should also benefit the industry down the road.
Are the changes worth the added complexity?
Yet, like any public policy, there are trade-offs. The proposed changes involve new definitions and complicated exceptions, among other things. You could argue that the changes don't take away all the burdensome rules; instead, they add more caveats that, if satisfied, may allow a provider to avoid current regulatory restrictions. It is hard to believe that the proposals won't, on balance, help stakeholders with the transition to value-based models, but only time will tell which specific proposals are the most beneficial.
Are providers really prepared to make the leap?
The new rules call for providers to ultimately take on substantially more financial risk in these value-based arrangements. However, full financial risk requires a good deal more in upfront investment, and the nuances of the risk assessment changes have yet to be clarified.
Downside risk could be a barrier for smaller healthcare entities. It will be a challenge for small and medium-size providers to assemble and deploy the infrastructure and expertise to make the shift to managing downside risk. For smaller, regional players, it's going to be harder to take advantage of the proposed flexibility.
If a provider goes fully at risk, the provider will have to invest in a wide range of assets. The providers who have a lot of resources, lawyers, big data and highly-trained technical professionals will continue to succeed, but it will be a pretty significant burden for rural providers or single-specialty providers.
In the end, these may be the exact things the government is trying to incentivize providers to invest in, and at some point cost/benefit analysis will compel practically all providers to make these investments to one degree or another.
Though policymakers say the goal of the proposed changes is to simplify the system, there will always be winners and losers. Providers and stakeholders should carefully review these changes to see how the proposed rules could impact their interests.
CMS is allowing for a 75-day comment period, ending 5 pm on Dec. 31, 2019. Go online to NashvilleMedicalNews.com for links to the proposed changes to the Stark Law and Anti-Kickback Statute.
Jesse Neil is a veteran healthcare attorney at Waller, a top-10 national healthcare law firm. His depth of knowledge and experience helps clients bridge the complex worlds of healthcare operations and public policy. Prior to joining Waller, he served as in-house counsel at Community Health Systems and previously served as assistant attorney general for the Office of the Tennessee Attorney General where he led investigations into healthcare entities and pharmaceutical companies with respect to compliance with fraud and abuse statutes. For more information, go to wallerlaw.com.