Provider alignment to get a boost under anti-kickback, Stark proposals: attorney

• Under proposed changes, hospitals no longer would be barred from entering into money-losing contracts with other providers for needed services.
• Hospitals in rural areas that provide transportation could get legal protection under the changes.
• The reduced legal risk could lead more providers to try value-based payment models.

Among the potential benefits to providers under proposed changes to Stark and anti-kickback regulations is a boost for hospitals’ post-discharge transportation assistance programs, according to an attorney.

This week, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to change enforcement of the Stark Law, while a separate proposed rule from the U.S. Department of Health and Human Services’ (HHS’s) Office of Inspector General would change enforcement of the anti-kickback statute.

Alyssa James, JD, an attorney for Hall, Render, Killian, Heath & Lyman, provided some early insights on the complex proposals to change enforcement of the federal healthcare anti-fraud laws. The changes aim to encourage more provider participation in value-based payment models.

The following Q&A was edited for clarity.

HFMA: What seems most important among the changes proposed?

James: OIG and CMS have proposed a number of safe harbors and exceptions targeted at the recent trends in value-based payment models. This is significant as it is important for providers to be aligned when transitioning from volume-based to value-based payment methodologies.

On the Stark Law side, significant is the proposed change to the definition of commercially reasonable, which provides that an arrangement may be commercially reasonable even if it does not result in profit for one or more of the parties [CMS now limits such arrangements to those that financially benefit the parties].

This is important because hospitals often have to contract for needed community services (psychiatric services, burn units, etc.) that may not necessarily result in a profit for the hospital.

On the anti-kickback statute side, the proposed expansion of the local transportation safe harbor may be particularly beneficial to hospitals and other healthcare providers in rural communities as well as hospitals serving patient populations that struggle to obtain transportation from the hospital following discharge.

HFMA: Could such changes increase participation in value-based models?

James: We do believe that these proposed changes could encourage more participation in these payment models. If providers believe that the legal risk of engaging in value-based enterprises has been reduced to an acceptable level, they may be more inclined to take on financial risk.

HFMA: Is this just the latest recently proposed change to these laws? Didn’t the Medicare physician payment proposed rule include changes, for example?

James: It is clear that HHS continues to be focused on incentivizing care coordination and participation in value-based models. These proposed changes are very targeted in nature and go beyond the scope of prior proposals.

HFMA: Any potential downsides to consider?

James: We are reviewing the proposed regulations further to analyze all of the nuances for providers as it relates to potential opportunities and risks.