The COVID-19 pandemic is producing even more evidence that proposed changes to Stark Law and Anti-Kickback Statute regulations can't come soon enough. But the rule changes, which are designed to encourage better care, could be delayed, also thanks to the coronavirus outbreak.
For years, the healthcare industry has warned regulators that providers are hesitant to engage in value-based arrangements or coordinate care, in part, because they're worried about running afoul of federal fraud and abuse rules. So federal officials in October proposed a wide range of changes to physician self-referral and safe harbor regulations to improve care coordination and encourage providers to take part in value-based arrangements, among other things.
Providers were broadly supportive of the new exceptions and safe harbors put forward by CMS and HHS' Office of Inspector General, but they adamantly opposed the addition of price transparency requirements.
Then the COVID-19 outbreak derailed HHS' plans for regulatory reform. HHS originally called their efforts to reform physician self-referral and safe harbor regulations a "sprint," but the pandemic has dramatically slowed the rulemaking process, said former OIG official Tony Maida, now a partner with McDermott, Will & Emery.
"COVID-19 has sucked up all of the oxygen," said former CMS official Don Romano, now a healthcare lawyer with Foley & Lardner.
CMS responded to the pandemic by waiving several Stark Law requirements, including broad waivers of fair market value requirements, to enable providers and other covered entities to better coordinate and deliver care during the public health emergency. OIG followed suit, saying it wouldn't go after providers for remunerations protected by 11 of CMS' 18 Stark Law waivers.
Throughout the pandemic, the waivers have allowed for "the sharing of resources without running afoul of fraud and abuse laws like the Stark Law and the Anti-Kickback Statute," said Mollie Gelburd, associate director of government affairs for the Medical Group Management Association.
For example, if a group practice contracts to provide a nursing home with physicians, it can also provide the facility with personal protective equipment because it poses a low risk of harm to the Medicare program or patients.
For industry insiders, it's a sign that the rules need to change.
"You can have care coordination efforts and relationships between entities that are not fraudulent and have good purposes, but (the current) rules might prevent them," Gelburd said. "The fact that waivers are necessary highlights that."
The proposed rule changes could also help address many of the care coordination problems brought to light by the pandemic, including those related to chronic disease management and preventive care like vaccines, experts said. "The general sentiments of what was proposed in the Stark and Anti-Kickback Statute rules might be particularly helpful in a COVID or post-COVID age," said Chad Brooker, associate principal for Avalere Health. "When people start coming back, there could be a situation where people have a lot of unmet health needs and that could seriously increase utilization for a period of time."
But the waivers and enforcement discretion will end alongside the national and public health emergencies, leaving providers not knowing whether the federal government will allow those arrangements to continue after the crisis ends. "We'd like to see the flexibilities continued as long as possible and to eventually see regulatory changes that are permanent so you don't have a situation where groups are concerned about the waivers being lifted at any time," Gelburd said.
According to regulatory experts, the lessons learned from the COVID-19 pandemic likely won't make it into the final Stark Law and Anti-Kickback Statute changes. CMS has limited power to create new exceptions under Stark Law. Any significant changes would need to go through a notice-and-comment period, just like rules proposed last fall.
OIG, on the other hand, has more flexibility to make changes because it has broad authority under the Anti-Kickback Statute to establish new safe harbors. Unlike the Stark Law, which mainly deals with Medicare rules, safe harbor rules apply to Medicare, Medicaid, the military's Tricare and other federal healthcare programs.
The Trump administration could add an exception or safe harbor triggered by a public health emergency because "public health officials anticipate that there will be waves of this virus," said Randi Seigel, a partner at Manatt Health. That could limit the need for CMS and OIG to issue waivers and notification of enforcement and discretion.
But CMS might not want to automatically issue blanket waivers, especially since it was able to issue COVID-19 specific waivers in short order, said former CMS and HHS official Nick Alarif, now a partner with McDermott, Will & Emery. "I think the agency would like to go through that fire drill, so they have more control over what the waiver says in a particular situation," he said.
Neither CMS or OIG is likely to move forward with additional rule changes, especially since they want to align their rules as much as possible. "I don't see the proposed rules changing in any meaningful way in response to the pandemic," Seigel said. But "the pandemic further exposed the disparities in health based on social determinants of health."
Moving forward, OIG might be more willing to enable providers and other stakeholders to address patients' social determinants of health by allowing more flexibility under the Anti-Kickback Statute and the Civil Monetary Penalties Law. Currently, those regulations ban providers from offering Medicare or Medicaid beneficiaries payments or in-kind benefits that are likely to influence them "to order or receive items or services from a particular provider," according to OIG. The proposed rule changes include more flexibility, including a new exception for telehealth technologies for some in-home dialysis patients.
Federal regulators will need time to evaluate how well the changes are working before they make more. But OIG could issue guidance and advisory opinions about whether specific arrangements fit within a safe harbor or pose a low risk of violating the Anti-Kickback Statute.
"I think once the rules come out, they'll be put on the back burner," Seigel said.
Still, there's hope that some of the lessons learned from the crisis will survive, even if they don't result in new rule changes. During the COVID-19 pandemic, OIG has responded on its website to frequently asked questions about common value-based arrangements. That's helped providers and other stakeholders respond to the crisis in real time rather than waiting for the formal approval process to play out. While the advisory opinion process can provide organizations with official OIG guidance about the arrangements they plan to enter, it's time-consuming, resource-intensive and slow.
"The time it takes to get any kind of formal guidance through the advisory opinion process just doesn't work," said Albert Shay, a partner at Morgan Lewis. "You can't sit around for six or eight months waiting for an advisory opinion from the OIG or CMS."
Providers hope OIG continues to engage in more informal regulatory discussions about common value-based arrangements, even when the public health emergency ends. But even if OIG continues its open dialogue with providers, the agency might pull back on giving informal advice through FAQs and other means if stakeholders use it as ammunition against the agency if it goes after them for violating the Anti-Kickback Statute. Providers could protest that they relied on OIG's informal guidance, even though the agency told them not to, Shay said.
COVID-19 could also affect how CMS and OIG finalize the proposed rules because the agencies are considering alternative versions of some proposed policies. "Some of those (policies) may be more liberal than others," Romano said. "It's possible that the COVID crisis is going to inform which of those choices the agencies settle on."
For example, the in-office ancillary services exception is the most important exception under the Stark Law because it requires that a service be performed in a specific place called "the same building" or "centralized building."
"With the move toward more telehealth … CMS might get to the point where it has a more liberal interpretation of the location requirement, but it can only bend it around the edges because that's a statutory requirement," Romano said.
Nobody knows when federal officials will sign off on the proposed rules now that the COVID-19 pandemic has sidetracked rulemaking at CMS and OIG. The size and complexity of the regulations always meant the approval process would take a while, mainly because CMS and OIG want to coordinate their rules as closely as possible. "The Stark Law, especially, is one of the most substantive rules we've seen out of there in a very, very long time," Maida said.
Now delays could push those reforms to the bottom of regulators' to-do lists. CMS and the White House Office of Management and Budget are required to approve a wide range of rules during the coming months, including several prospective payment system rules and the physician fee schedule.
Some experts think the federal government will approve the new regulations next year since policymaking tends to slow down in the run-up to a presidential election. But "the Trump administration is looking to get these regulations out prior to the election so it can claim some political benefit," Romano said. "Somebody pretty high up in the food chain is going to have to decide that's where OMB is going to concentrate its efforts and maybe let some other things slide for a little while."
Regardless of the election's outcome, there's likely to be significant turnover among political appointees. They'll want to wrap up the rules to cement their legacies before they leave government, particularly HHS Deputy Secretary Eric Hargan, who's pushed for changes to fraud and abuse laws that could limit care coordination.
It's clear that changes to physician self-referral and safe harbor regulations are necessary for the transition to value-based payment, but they aren't sufficient. Providers will have to reform how they deliver care to achieve meaningful change. And while many providers have been too busy to focus on value-based care during the COVID-19 crisis, there's "a coalescing around" the need to accelerate the move to value-based payment post-COVID, said Chet Speed, chief policy officer at the American Medical Group Association.
"It's financially probably a safer place to be in case another pandemic like this breaks out," he said.
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