HHS Proposes Rollback of Stark Law and Anti-Kickback Statutes

Modernizing regulations under the Stark Law, also known as the physician self-referral law, and reforming the federal anti-kickback statute would reduce the compliance burdens health care providers face, according to a proposal published today by the US Department of Health and Human Services.

The HHS proposal put forward, in collaboration with the Centers for Medicare & Medicaid Services, is intended to increase opportunity and certainty for health care providers with value-based care and improve coordinated care for patients. It is a part of HHS’s Regulatory Sprint to Coordinated Care, a program designed to examine federal regulations a statues that may prevent providers successfully transitioning into value-based care.

HHS Secretary Alex Azar said, “Regulatory reform has been a key piece of President Trump’s agenda not just for faster innovation and economic growth, but also better, higher-value health care. Our proposed rules would be an unprecedented opportunity for providers to work together to deliver the kind of high-value, coordinated care that patients deserve.”

Under the original Stark law, enacted in 1989, most health care was paid for primary via fee-for-service and restricted physicians from “making referrals for certain healthcare services payable by Medicare if the physician (or an immediate family member) has a financial relationship with the entity performing the service” in order to avoid profit motives according to CMS. There are statutory and regulatory exceptions but they still do not align with the current models of health care delivery and payment.

HHS and CMS stress that they believe the Stark law in its current form stifles innovation and discourages health care providers from transitioning to value-based arrangements—among other models that could improve quality, outcomes, or lower costs—for fear of violating the law.

“These proposed rules would be a historic reform of how health care is regulated in America,” said HHS Deputy Secretary Eric Hargan.

The proposed reforms would create new exceptions to the law that would allow health care providers to design and enter into value-based arrangements, said CMS in a fact sheet. The new exceptions would also include “woven fabric of safeguards to ensure that the Stark Law continues to provide meaningful protection against overutilization and other harms.”

Both agencies said, “These proposals recognize that incentives are different in a healthcare system that pays for the value, rather than the volume, of services provided.”

CMS Administrator Seema Verma added, “We are updating our antiquated regulations to decrease burden for providers and helping bring down these increasingly escalating costs.”

Responses to a June 2018 CMS Request for Information on the potential rule changes brought up some concerns, including the amount of time and resources currently invested in understanding and complying with the current Stark law, which CMS addressed, responding that the new regulations would provide additional guidance.

—Edan Stanley

References:
U.S. Department of Health & Human Services HHS Proposes Stark Law and Anti-Kickback Statute Reforms to Support Value-Based and Coordinated Care [press release.] https://www.hhs.gov/about/news/2019/10/09/hhs-proposes-stark-law-anti-kickback-statute-reforms.html. Accessed October 9, 2019.

Centers for Medicare & Medicaid Services. Modernizing and Clarifying the Physician Self-Referral Regulations Proposed Rule [fact sheet]. https://www.cms.gov/newsroom/fact-sheets/modernizing-and-clarifying-physician-self-referral-regulations-proposed-rule. Accessed October 9, 2019.