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AHA Calls for Reforms to Stark, Anti-Kickback Laws to Remove Barriers to Care Coordination

July 6, 2016
by Heather Landi
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The American Hospital Association (AHA) released a report that proposes that the Stark and Anti-Kickback laws and regulations impede hospitals’ ability to coordinate care and calls on legislators and regulators to reform these regulations in order to remove those legal barriers.

AHA shared the report, titled “Tackling Outdated Regulatory Barriers that Impede Health Care Transformation,” with Congress and the U.S. Department of Health and Human Services (HHS) in order to examine what the organization sees as barriers to transforming health care delivery created by outdated fraud and abuse laws. AHA contends that aspects of the Stark Law, which addresses physician self-referral, and the Anti-Kickback Law are impeding the types of collaborative arrangements between hospitals and physicians that are needed to transition to value-based care delivery. And, in the report, the organization also recommends how to tackle those regulatory barriers.

“The new payment models being promoted by policymakers and embraced by the hospital field create accountability for the health of a patient beyond an inpatient admission, an outpatient procedure or an office visit – a responsibility that requires hospitals, physicians and other health care providers and professionals to work as a team and with the patients they care for. Common goals, aligned incentives and a regulatory structure that supports rather than impedes those efforts are essential to success,” Melinda Reid Hatton, general counsel and senior vice president at AHA, wrote in a blog about the report.

The AHA report comes on the heels of a white paper released last week by Senate Finance Committee Chairman Orrin Hatch (R-UT) examining aspects of the Stark law that prevent healthcare providers from moving to alternative payment models. 

Healthcare stakeholders have cited the need to modernize the Stark Law as the nation pursues coordinated care as a means to improve quality and reduce costs. According to the white paper released by Sen. Hatch, the Stark law prohibits a physician from referring Medicare patients for “designated health services” (DHS) to an entity with which the physician has a financial relationship, unless an exception applies, and that regulation can impact electronic health record (EHR) access to affiliated providers and hospitals.

The AHA, in its report, cites seven regulatory barriers that need to be tackled and several of those barriers involved health IT. Specifically, AHA assets that “impractical limits on sharing EHRs and analysis tools needed to improve and coordinate care” as one major regulatory barrier.

“Under new models of payment, hospitals are financially responsible for creating an efficient care team that achieves lower costs and higher quality. The underpinning for a care team to do its best in meeting the needs of a patient—enabling him or her to achieve and maintain the best health outcome—is to have ready access to the information necessary to make informed decisions about the patient’s care,” the AHA report stated.

“The certified electronic health record (EHR) is one component of the shared infrastructure that is necessary for a well-coordinated care team. When providers across the care continuum utilize certified EHRs that are connected, all benefit from having the ability to access and use information about the patient’s condition and history that supports their role on the care team,” the AHA report authors wrote.

However, AHA contends that current rules for providing an EHR do not allow hospitals to bear the full cost; “instead, physicians must bear a portion of the costs, without regard to the contribution they otherwise make to the collaborative effort.”

And further, the AHA report authors wrote, currently there are no exceptions for a hospital to provide data analytic tools to assist physicians in making treatment decisions for patient.  These tools would enable physicians to assess data from various sources and identify clinical pathways for specific conditions, medical histories and patient populations, the AHA contends.

“Investing in needed infrastructure is a pre-condition for implementing new payment models. The Stark and Anti-Kickback Laws should be modernized to permit hospitals to subsidize the start-up costs needed to meet the objectives of these new payment models,” the AHA report authors stated.

The AHA report contends that anti-fraud laws restrict hospitals and physicians from providing assistance to patients to them recover faster after they leave the hospital, including self-monitoring digital health tools, such as scales or blood pressure cuffs.

The AHA report authors stated, “The Anti-Kickback Law also applies to a hospital’s relationship with a patient. The general prohibition on providing anything of value to ‘induce’ the purchase or order of items or services paid for by the Medicare program also applies to assistance to patients. Providing vouchers for a cab ride to an appointment, scales to monitor weight loss or cuffs to monitor blood pressure are ‘remuneration’ that could be characterized as a prohibited inducement. There is no exception in the Anti-Kickback Law protecting these patient benefits.”

To address these barriers, AHA proposes modernizing the laws, specifically recommending that Congress grant wider exemptions. “The fraud and abuse laws need to be adapted to support not hamper the new payment models. To that end, Congress should create legal safe zones to support and foster arrangements designed to achieve the goals of payment-for-value rather than volume-based programs," the AHA report authors wrote.

Further the report states, “Hospitals and physicians should not have to spend hundreds of hours or thousands of dollars in hopes of stringing together components from the existing exceptions and safe harbors or developing inefficient work-arounds to achieve the goals of alternative payment models (APMs). Nor should hospitals be limited in their ability to provide patients the full spectrum of assistance they need to recover. There should be clear and comprehensive protection for arrangements designed and implemented to meet those goals."

AHA notes that HHS has used its statutory authority to grant waivers of the Anti-Kickback, Stark and CMP Laws for participants in certain programs such the MSSP and bundled payment programs. However the current patchwork waive approach will not provide sufficient protection to providers as participation in integrated payment and delivery models increases, the AHA report authors argue.

To modernize fraud and abuse laws and remove these legal barriers, AHA recommends enacting new, comprehensive safe harbors under the Anti-Kickback law. Specifically, the new safe harbor should permit support that is financial, such as providing patients with scales to monitor weight .And, AHA proposes that reforms to the Stark Law would “refocus it on physician ownership, its original purpose, which means that compensation would be regulated exclusively under the Anti-Kickback Law.” 





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