Panel will study rewrite of Stark law for the age of value-based pay
Hospitals are hopeful that a new interagency effort at HHS will make it easier for them to participate in value-based payment models without violating anti-kickback laws.
During a webinar hosted by the American Hospital Association last week, CMS Administrator Seema Verma announced plans to launch the interagency group, which will include her agency, HHS’ Office of Inspector General, HHS’ general counsel and the Justice Department.
HHS has been hearing provider complaints for years about the Stark law, which Congress passed in 1989.
“I think the Stark law was developed a long time ago, and given where we’re going in terms of modernizing (Medicare) and the payment systems we are operating under now, we need to bring along some of those regulations,” Verma said.
Relieving the burden around Stark and anti-kickback laws is also a key focus for Eric Hargan, HHS’ acting secretary and a former healthcare attorney, Verma said.
“We look forward to the opportunity to interact with the new group to discuss how best to modernize the Stark and similar laws—which were created in a different era for a different purpose—to support more-coordinated and effective care for patients,” said Rick Pollack, the AHA’s
CEO.
Hospitals are hopeful the group will take a look at the Justice Department’s use of the False Claims Act when pursuing alleged violations of the strict liability provisions of the Stark law.
The Justice Department’s use of the False Claims Act has imposed excessive and disproportionate penalties on hospitals, often leaving them no option but to settle or close their doors, according to America’s Essential Hospitals.
“Not only does this antiquated law create unnecessary barriers to clinical integration and care coordination, it also carries costly compliance burdens that hit essential hospitals especially hard,” a spokesman for the trade group said.
Over the last few years, HHS has repeatedly issued waivers of the fraud and abuse laws specific to certain pay models in an effort to reduce barriers to participation.
The Federation of American Hospitals hopes the interagency group will lead to an end of the current piecemeal approach to bundled-payment program fraud-and-abuse waivers with a single, overarching bundled-payment waiver of the Stark law and anti-kickback statute, according to Sean Brown, an FAH spokesman.
This new universal waiver should apply to gain-sharing and other similar financial arrangements between hospitals and other providers under a CMS-led bundled-payment program, he said. Others shared the same hope. “CMS has legal authority to develop regulatory exceptions to the Stark law, so there are opportunities for CMS to provide greater flexibility for value-based payment arrangements,” said Jeff Micklos, executive director of the Health Care Transformation Task Force, which represents both hospitals and insurance companies.
The Stark law prevents hospitals from paying providers more when they meet certain quality measures, such as reducing hospital-acquired infections, while paying less to those who miss the goals. Hospitals have said the Stark law makes it difficult for physicians to enter innovative payment arrangements because they are not susceptible to fair-market value assessment, a Stark requirement.
Stark also prohibits doctors from referring Medicare patients to hospitals, labs and colleagues with whom they have financial relationships unless they fall under certain exceptions.
Physicians and hospitals can be found liable even if they didn’t intend to violate the Stark law, and offenses can carry significant financial penalties.
“We’re committed to moving away from a fee-for-service system and toward one that favors value and outcomes,” Verma said.
Despite HHS’ focus in reducing barriers regarding the law, Verma noted that Congress may ultimately need to intervene to make meaningful changes to the Stark law to reduce its effect on value-based care transitions.
“We’re committed to moving away from a fee-for-service system and toward one that favors value and outcomes.”
Seema Verma CMS administrator