WASHINGTON — If the hospital you work for gives you a cybersecurity system, is that a violation of federal law? The Department of Health and Human Services (HHS) is thinking hard about that as it attempts to revise the Stark self-referral law, an HHS official said here Wednesday.
In June, HHS requested comments on how to revise the 1989 law, which “prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership, investment, or compensation), unless an exception applies,” as CMS notes on its website. One big concern was whether and how the laws were stifling efforts of practices to move from getting paid under a fee-for-service system to getting paid under a value-based system.
“We received 375 comments totaling about 3,500 pages,” Kimberly Brandt, CMS’s principal deputy administrator for operations, said Wednesday at an event sponsored by the Brookings Institution, a left-leaning think tank here. “The comments we got were extremely thoughtful and really gave us great insight into where it is people were having impediments to value-based care.”
Brandt listed several areas that the comments fell into. “The first area we heard about was alternative [payment] models and care coordination,” she said. “People were asking, ‘Should there be specific exceptions’ [for those arrangements] and how would those exceptions work? There was a lot about how that plays out and what should stay and what should go.”
Another area — one Brandt said CMS hadn’t really thought much about — “was in the area of being able to donate cybersecurity technology … How [does that] work in a system where a hospital asks a physician office to put a certain type of cybersecurity software in place; are they allowed to give that to them, or not? There were also a lot of questions about electronic health records and that kind of technology, particularly in coordinated care types of settings.”
Other issues included making sure any new exceptions would not exacerbate ability to have overutilization in the program, and issues of cash versus “in kind” gifts. “Is it OK if we provide pizza to the attending doctor who got caught because it’s -60° outside and he couldn’t get home?” she said.
Overall, “the number one thing we heard about is clarity — commenters were very clear they wanted clarity in the definitions of ‘reasonableness’ and ‘fair market value,'” Brandt said. “Traditionally, those definitions have consistently been less than clear and have caused constructive debate in the industry, and people felt that without clarity, it held them back from being able to know where the line is.”
HHS deputy secretary Eric Hargan pointed out that his agency needs to be mindful of the consequences of changing the Stark law. “Most commentators believe that regulatory changes are needed to support the move [to] value-based payment, but they also recognize there is potential for program integrity vulnerability,” he said. “We cannot ignore the current fee-for-service system, and the reality is that it will be around in some form or fashion for the foreseeable future. It is the majority of the system right now, but it has a smaller and smaller percentage, yearly, of the overall market.” Rulemaking on the Stark law will begin “soon,” he added.
The department also is working on changes to the federal anti-kickback statute, which “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),” according to the HHS Inspector General’s website.
“Here too, we’re going to be very attentive to the need for program integrity,” said Hargan. “The questions include, ‘How can we expect a provider to improve outcomes for, say a patients with a poor track record of not showing up to appointments if we’re not willing to look at how a patient can get assistance in transporting them to those appointments? How can we encourage patients to take more ownership of their own healthcare without thinking about providing them — maybe free of charge — patient-empowering technologies such as a heart monitor or tablet? … I’m not prejudging these things; these are just questions that have been raised.”
The anti-kickback statute is a little more complicated to revise than the Stark law because it’s a criminal statute and is enforced by the Department of Justice, said Kevin McAnaney, a healthcare attorney here. Criminal prosecutors tend to be “risk averse” and would rather target too many people “than let a bad guy go … they have this world view that people are all out to rip us off.”
Under some of the new value-based payment systems like accountable care organizations (ACOs), providers are incentivized to keep patients within a certain referral network, “so it’s treading close to the line,” he said. In addition, some of the investments in an ACO, “even if you’re only [making them] for a commercial entity or in one of the waivered programs, those benefits also accrue to Medicare fee-for-service patients.”
The concern is that such arrangements could be targeted under the federal False Claims Act, where penalties “are three times the amount of the claim and a mandatory $15,000 per claim,” said McAnaney. “So if you’re looking at a value-based system … you’re talking a potentially huge number of claims, a huge number of referrals … So it really is a significant chill on a health system that’s trying to implement these programs.”