Federal Government Seeks to Commentary Relating to Anti-Kickback Laws

By: Jeffrey Lynne November 2, 2018 12:31 am

Time to read: 5 Minutes

Federal Government Seeks to Commentary Relating to Anti-Kickback Laws

According to an article published by FierceHealthCare.com, there continues to be a groundswell of opposition from hospital trade groups to the continued application of the federal anti-kickback laws to the extent they “stand in the way of growing participation in value-based models.”

Comments and opposition to existing payment structures came from major hospital groups and other industry stakeholders in response to the Department of Health and Human Service Office of Inspector General’s request for information on ways to reform the Stark and anti-kickback laws.

In its letter to OIG, the Federation of American Hospitals (FAH) said value-based payments are “hindered by the existing fraud and abuse regime.” To address this, OIG should build an overarching waiver to anti-kickback laws for advanced payment models run by the Centers for Medicare & Medicaid Services.

Provider groups, including the American Hospital Association, have long argued that the Stark and anti-kickback laws pose a major barrier to care coordination, a crucial piece of these new payment arrangements.

“Provided that the compensation to be received is fair market value, does not take into account the volume or value of referrals and is commercially reasonable, the arrangement should be deserving of safe harbor protection,” the group said.

Another hospital trade industry group, America’s Essential Hospitals (AEH), also wrote in favor of the OIG consider narrowing its use of anti-kickback and civil monetary penalty statutes.

Anti-kickback provisions, AEH said, are overly broad and could apply to any payment that has an impact on referrals, even if ultimately it leads to better care or otherwise benefits patients. At the same time, existing anti-kickback safe harbors are very narrow, the group said.

Narrowing the use of these statutes would offer providers greater certainty in the work they’re doing and would allow for clarification of regulatory requirements, AEH said.

“Regulatory uncertainty has put essential hospitals in an untenable position,” AEH said. “The very activities our members undertake to support new delivery system and payment models—actives the Centers for Medicare & Medicaid Services and Congress have encouraged—increase their exposure under the AKS and CMP law.”

The Association of American Medical Colleges (AAMC), which represents academic medical centers, noted in its commentary to OIG that “the Stark and anti-kickback laws are relics of a healthcare system that hadn’t yet conceived of value-based models.”

According to their argument, because alternative payment models are tightly regulated, it’s unlikely that patients would receive poor care, AAMC said.

“It is critical that CMS, the OIG, and other associated agencies coordinate their efforts to allow waivers of the physician self-referral law, the civil monetary penalties and anti-kickback laws, as appropriate to support the clinical and financial integration needed for the success of these new delivery and payment models,” AAMC said.

At the same time, and just last week, President Trump signed the “Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act” or the “SUPPORT for Patients and Communities Act”, H.R.6 — 115th Congress (2017-2018), which we reported about back on October 4th.

Included within that legislation was a section sponsored by Senators Marco Rubio and Amy Klobuchar entitled the “Eliminating Kickbacks in Recovery Act” (EKRA) which essentially makes the federal Anti-Kickback Statute applicable to private health care plans. As adopted, the new law:

  • Makes it illegal to provide, or receive, financial kickbacks for referring patients to recovery homes and clinical treatment facilities. These kickbacks are already illegal under Federal health care plans, like Medicare, but there is no federal law to prohibit them in private health insurance plans;
  • Fine anyone found guilty up to $200,000 or 10 years of prison, or both; and
  • Establish exceptions to enable legitimate cases of patient referral.

Those “exceptions” would be generated by HHS through adoption and publication in the Code of Federal Regulations (CFR).

We have reported in the past that it seems fundamentally unfair that healthcare providers involved in federally funded programs could seek guidance from OIG as to their behavior, while private pay providers could not. This was specifically true for providers in the SUD treatment space, who could only seek such input from their regulating agencies, such as the Department of Children and Families (DCF) in Florida. But since only the Florida Patient Brokering Act applied to such behavior, which is a state (not federal) criminal law, DCF was not authorized to comment upon such behavior.

With the adoption of EKRA and the anticipated development of regulations adopting “safe harbors,” SUD treatment providers should have clarity on what behaviors would trigger federal penalties. That law, however, does not cause state laws, such as Florida’s Patient Brokering Act, to be superseded. Those laws will remain on the books and will be prosecuted separately, without interpretation of the new federal law having any impact.

Jeffrey Lynne

Jeffrey Lynne is a partner at Beighley, Myrick, Udell, Lynne + Zeichman, P.A. in both the firm’s Land Use & Zoning and Governmental Affairs & Regulated Industries practice groups. He also chairs the Firm’s Behavioral Healthcare Practice Group and represents clients with local, state and federal zoning, permitting, licensing, and regulatory matters. Mr. Lynne received his undergraduate education at the University of Florida and attended law school at the University of Miami (1997).

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