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April 4, 2017



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Stark Briefing Addresses Value-Based Payment

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Stark Briefing Addresses Value-Based Payment

The Healthcare Leadership Council (HLC) hosted a panel briefing on Stark and anti-kickback law on March 24, in the Rayburn House Office Building. Panelists represented Ascension Health, a non-profit healthcare organization with 2,500 sites of care; Medtronic, a “global leader in medical technology”; and the healthcare practice of Crowell & Moring. The HLC arranged the event as part of its mission to modernize the fraud and abuse laws that can act as barriers to the kind of care coordination HLC envisions.

Panelists shared the sentiment that Stark and anti-kickback law were designed for a payment landscape that isn’t necessarily reflected in today’s transactions and can act as impediments to a value-based payment environment. They argued that the laws should be updated to provide clear, comprehensive protection for those value-based payment arrangements that do not pose undue risk of fraud/abuse by, for example, extending existing waivers to all payers; or, short of this, creating new exceptions and safe harbors; as well as clarifying key standards found in Stark exceptions and anti-kickback safe harbors.

For example, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) replaced Medicare’s sustainable growth rate formula with a new Quality Payment Program that determines physician updates based on participation in either the Merit-based Incentive Payment System (MIPS) or Advanced Alternative Payment Models (APMs). Many of the metrics applied under MIPS and the APMs emphasize care coordination within individual health care entities as well as across multiple sites of service. However, Medicare self-referral prohibitions in the Stark law, which was implemented over 20 years ago, pose barriers to care coordination and to the participation of physician group practices in MIPS and APMs. CMS has recognized this and has created waivers for accountable care organizations (ACOs) and the Medicare Shared Savings Program (MSSP).

Still, more work needs to be done. AAOS is working with the Senate Finance Committee and a coalition of stakeholders to further address this concern by providing the Centers for Medicare & Medicaid Services (CMS) with the regulatory authority to create exceptions under the Stark law for these types of payment arrangements and to remove barriers in the current law to the development of such arrangements. Specifically, AAOS hopes to amend the Stark law to allow for the creation of exceptions that: (1) promote care coordination within MIPS; and (2) facilitate physician group practice participation in APMs under the Medicare program. This proposal would not undermine the original intent of the Stark law, which is to regulate improper incentives that could lead to increased utilization.