On Monday, January 11, senior representatives of the Centers for Medicare & Medicaid Services (“CMS”) and the U.S. Department of Health and Human Services' Office of Inspector General (“OIG”) delivered Part II of a virtual presentation to American Health Law Association members and other health industry stakeholders to explain and elaborate on significant new regulations that become final on January 19, 2021. (Our coverage of Part I can be found here.)
CMS Senior Technical Advisor, Lisa Wilson, and CMS Technical Advisor, Matthew Edgar, discussed CMS's recently issued final rules amending current and adding new exceptions to the Physician Self-Referral Law (“Stark Law”). OIG Senior Counselor for Medicaid Policy, Andrew VanLandingham and OIG Senior Counsel, Meredith Williams, discussed OIG's recently issued final rules amending current and adding new safe harbors to the Anti-Kickback Statute (“AKS”).
The Stark Law and AKS govern certain financial relationships among health care providers and entities. The Stark Law generally prohibits physicians from referring patients to receive "designated health services" payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies. See 42 U.S.C. § 1395. The AKS generally prohibits the knowing and willful payment of "remuneration" to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). See 42 U.S.C. § 1320a-7b(b). The new Stark Law exceptions and AKS safe harbors are a result of the Regulatory Sprint to Coordinated Care initiated by the Department of Health and Human Services. The rules center around the concepts of Value-Based Enterprises (“VBE”) and Value-Based Arrangements (“VBAs”) and are intended to allow the exchange of remuneration among VBE participants while promoting quality in patient care.
CMS Technical Advisor, Matthew Edgar, discussed the commercial reasonableness requirements of VBAs and provided insights into several exceptions. Significantly, Mr. Edgar emphasized that an arrangement may be commercially reasonable even if it does not result in profit for one or more of the parties, but that the existence of profit is not completely irrelevant to determining whether an arrangement is commercially reasonable.
Regarding the electronic health records exception, Mr. Edgar emphasized that the exception is now permanent and that it permits cybersecurity donations. Further, the exception permits donations of replacement services, including replacement of an entire electronic health records system. Mr. Edgar stated that commenters had previously informed CMS that they could not afford to update legacy systems under the previous rules. Although the donee participant must contribute fifteen percent of the cost contribution in advance of the initial donation, the donee may divide up fifteen percent of the cost of a replacement/upgrade donation at intervals after receiving the replacement donation.
Regarding the isolated transactions exception, Mr. Edgar stated that it applies to a one-time sale of property or practice or a single instance of forgiveness of an amount owed in settlement of a bona fide dispute. It does not apply to a single payment for multiple or repeated services, such as payment for service previously provided but not yet compensated.
Regarding the revised rule on writing and signature requirement, Mr. Edgar stated that, so long as an arrangement complies with all other requirements, the lack of a signature or failure to reduce the agreement to writing does not exclude the agreement from the exception so long as the agreement is reduced to writing and is fully signed within 90 calendar days of its initiation. This does not apply to financial compensation amendments. Mr. Edgar stated that this change resulted from a significant number of past VBAs reviewed by CMS that complied with one or more exceptions in all respects except for either a lack of signature or lack of complete reduction to writing prior to the initiation of the agreement.
Regarding the new reconciling payment discrepancies policy, CMS Senior Technical Advisor, Lisa Wilson, emphasized that the analysis of compliance with this section will be fact-based. This policy allows payment discrepancies to be resolved within 90 calendar days following termination of the arrangement.
Regarding both the cybersecurity technology and services safe harbor and exception, OIG Senior Counselor for Medicaid Policy, Andrew VanLandingham emphasized that there is no provider cost contribution requirement for electronic services donations that fall within the category of cybersecurity. For example, while a donation of cybersecurity software services falls within this safe harbor, a donated laptop that happens to contain pre-loaded cybersecurity may not.
Regarding the OIG's new CMP Exception for Telehealth for In-Home Dialysis Patients, he stated that that the exception is designed to protect the provision of telehealth technologies to an individual with end-stage renal disease who receives home dialysis paid for by Medicare Part B. Mr. VanLandingham emphasized that the risk of fraud and abuse is low because patients are unlikely to choose in-home dialysis to obtain a product such as a cell phone.
Regarding the CMS-sponsored model exception, OIG Senior Counsel, Meredith Williams, emphasized that the exception does not apply to every arrangement that could be taken. Rather, it only applies where CMS has determined that a particular value-based arrangement complies with a CMS-sponsored model. The CMS-sponsored model parties or participants must satisfy programmatic requirements as may be imposed by CMS in connection with the use of the safe harbor. The incentive must take into account the patient's well-being.
As January 19, 2021 approaches, health care industry stakeholders should ensure that their VBAs comport with these new complex regulations while keeping in mind the policy goals of CMS and OIG, as emphasized by their senior representatives above.
Originally Published by Seyfarth Shaw, January 2021
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