On October 9, 2019 the Center for Medicare and Medicaid Services (CMS) (download pdf) and the HHS Office of the Inspector General (OIG) (download pdf) issued proposals that will reform the Stark Law and Antikickback Statute (AKS) in ways that will facilitate innovative arrangements for coordinating care consistent with a shift to a value-based healthcare system. HHS will create exceptions for healthcare providers that enter into agreements with other parties if they are aimed at cutting costs and improving patient health, the officials said. The Stark proposed rule would create new exceptions to the Stark Law for value-based arrangements and the exceptions would apply to care delivery for all patients, not just Medicare beneficiaries. In addition, the Stark proposed rule also includes changes to the definition of fair market value to eliminate the connection to the volume or value standard, which has been an impediment to developing alternative payment models and other value-based care initiatives and is at the heart of the legislation and regulatory reform we have been advocating for at SCAI.

The AKS proposed rule creates three new safe harbors, including for (i) care coordination arrangements aimed at improving quality and outcomes, (ii) value-based arrangements with substantial downside risk, and (iii) value-based arrangements with full financial risk. The rule also proposes modifications to the existing safe harbor under the AKS for personal services and management contracts to add flexibility for outcomes-based payments and part-time arrangements.

Through these proposals, CMS granted new exceptions to the Stark law in addition to the in-office ancillary services exception for entities participating in a “value-based purpose,” defined as:

1. coordinating and managing the care of a target population;
2. improving the quality of care for a target patient population;
3. appropriately reducing the costs to, or growth in expenditures of, payors without reducing the quality of care for a target patient population; or
4. transitioning from health care delivery and payment mechanisms based on the volume of items and services provided to mechanisms based on the quality of care and control of costs of care for a target patient population.

Link to the 333-page Stark proposed rule issued by CMS

Link to the 386-page AKS proposed rule issued by HHS-OIG

Fact sheet providing overview of the Stark proposed rule by CMS

Fact sheet providing overview of the AKS Proposed rule by HHS-OIG

Comment letters will be due 75 days after the two proposals are formally entered into the Federal Register. SCAI plans on submitting comments and working with allied organizations to provide input. For any questions, please contact Curtis Rooney, Vice President of Government Relations, at [email protected].