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Association Comments on Fraud and Abuse Proposals

In Dec. 20 letters to the Centers for Medicare & Medicaid Services (CMS) and the Office of the Inspector General (OIG), America’s Essential Hospitals emphasized the challenges inherent in caring for complex patients and the need to modify the Anti-Kickback Statute (AKS) and Physician Self-Referral Law (Stark law) to remove barriers to care coordination among this population.

The letters responded to proposed rules from the respective agencies aimed at modifying both the Stark law and AKS to allow for expanded value-based arrangements that encourage care coordination across the continuum of care.

Anti-Kickback Statute

The OIG’s proposed rule would modify existing safe harbor protections and add new safe harbors under the federal AKS for certain coordinated care and associated value-based arrangements. The rule also would add exceptions to the beneficiary inducements civil monetary penalty law, which prohibits inducements offered to patients for certain patient engagement.

In its letter, America’s Essential Hospitals encouraged OIG to:

  • further examine its proposed terminology to account for essential hospitals and their complex patient populations before finalizing such terms for use in any AKS safe harbor;
  • include types of risk other than downside financial risk in the development of safe harbors for value-based enterprises;
  • include in the proposed care coordination arrangement safe harbor protections for in-kind and monetary remuneration, the use of valid outcome measures that account for differences among hospitals and patient populations, and exemption from the contribution requirement for essential hospitals;
  • finalize, with modification, its safe harbor to protect patient engagement and support, with explicit protection for tools and support that address social determinants of health; and adopt a corresponding civil monetary penalty exception to protect related patient incentives;
  • finalize creation of a safe harbor for CMS-sponsored models and ensure this protection extends to value-based care and alternative payment models (APMs) that target the Medicaid and uninsured populations;
  • finalize the proposed safe harbor for donation of cybersecurity software and related services; the removal of the sunset provision of the electronic health record (EHR) safe harbor; the elimination (or, in the alternative, reduction) of the current contribution requirement for the EHR safe harbor; and clarification that the proposed safe harbor for care coordination includes protection for the broad use of technologies that promote care coordination, value-based payment, and access to care;
  • finalize its modifications to the safe harbor for local transportation to eliminate the distance limit on transportation of discharged patients, including transport to any location of the patient’s choice, and include transport for health-related, nonmedical purposes in the final safe harbor; and
  • clarify the definition of “fair market value” to acknowledge uncompensated care provided by essential hospitals.

Physician Self-Referral Law

CMS’ proposed rule targets undue burden of the Stark law. The agency proposes exceptions to Stark for certain value-based compensation arrangements between or among physicians, providers, and suppliers.

In its letter, America’s Essential Hospitals encouraged CMS to:

  • finalize proposals for exceptions to the Stark law that support value-based arrangements and include social determinants of health as a value-based purpose under the final exceptions;
  • not include price transparency requirements as part of the value-based arrangements exceptions proposed under the Stark law;
  • finalize proposals that protect against cyberattacks; confirm protection under new exceptions for the broad use of technologies to improve access to and coordination of care; and eliminate the EHR contribution requirement for physicians at essential hospitals;
  • finalize its clarified definition of “commercially reasonable” and further clarify that uncompensated care provided by essential hospitals is an appropriate consideration under the definition of “fair market value” and “commercially reasonable;” and
  • finalize its proposal to decouple the Stark law from the AKS and further narrow the scope of the Stark law.

Contact Senior Director of Policy Erin O’Malley at or 202.585.0127 with questions.


About the Author

Rachel Schwartz is a former policy associate at America's Essential Hospitals.

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