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Anti-kickback statutes (AKSs) were originally enacted in 1931 to stop Great Depression–era employers from circumventing wage provisions in federal contracts. Since its enactment, AKSs’ main focus has changed and is currently aimed at the health care industry. In addition to AKSs, Stark laws were enacted over 30 years ago to address physician self-referral of Medicare patients. Both laws comprise the government’s main tools for fighting fraud, waste, and abuse.
However, AKSs and Stark laws have not been updated to keep pace with changes in how medical practices do business and care for patients.
Over the years, additional interpretation and clarification has been issued by the Department of Health and Human Services (DHHS) and the Office of Inspector General (OIG). In DHHSs’ June 1, 2012 Advisory Opinion No. 12-06 there is guidance regarding legality of anesthesia services providers’ contract with physician-owned professional corporations or limited liability companies to provide anesthesia services. Specifically, it focused on the “company model” where owners of an ambulatory surgery center (ASC) create a separate company for anesthesia services which directly contracts with anesthesia providers and charges for the anesthesia services while the ASC charges for facility fees. Anyone with specific questions may request an advisory opinion from the OIG about the application of OIG’s fraud and abuse authorities and existing or proposed business arrangements. An OIG advisory opinion is legally binding on the requesting party and DHHS, but not on any other governmental department or agency. While advisory opinions are specific to the entity that requested it and specifically states, “This opinion may not be relied on by any persons other than [name redacted], the requestor of this opinion....” It captured the attention of the medical community. The AGA has argued that this opinion should not be interpreted to mean that all company model frameworks necessarily violate the AKSs and the OIG’s Advisor Opinions FAQ states no person or entity can rely on an advisory opinion issued to someone else. However, Advisory Opinion No. 12-06 has been cited in AKS investigations ever since.
When Congress passed the Medicare Access and CHIP Reauthorization Act (MACRA) in 2015, it changed how physicians would be paid under Medicare and sought to transition physicians to a more value-based payment system. Physicians were incentivized to develop physician-driven payment models to improve efficiency and patient outcomes. However, existing Stark self-referral laws prohibit physicians from referring patients to an entity in which they have a financial interest. As a result, physician practices are unable to participate in many advanced alternative payment models. Stark laws, which have not been updated since their enactment 30 years ago, pose barriers to care coordination since they prohibit payment arrangements that consider volume or value of referrals or other business generated by the parties. These prohibitions stifle innovations in delivering care by inhibiting practices from incentivizing their physicians to deliver patient care more efficiently, because the practices cannot use resources from designated health services in rewarding or penalizing adherence to new clinical care pathways.
Congress recognized that the Stark law was a barrier to new health care delivery models. Congress, therefore, authorized the HHS Secretary to waive Stark self-referral and anti-kickback laws for accountable care organizations (ACOs). This waiver was not extended to physician-driven alternative payment models (APMs), that also need these exceptions to drive innovation in health care and to implement MACRA law as Congress intended.
AGA and the physician community have long sought to update Stark self-referral and AKSs. Last year, CMS proposed exceptions directed at value-based arrangements that would have allowed providers to participate in value-based arrangements while still protecting the Medicare program from potential abuses. Many of the changes that CMS proposed would have allowed physician practices to engage in value-based arrangements that would improve patient care and AGA provided comments on both the Stark and AKS proposed rules. However, CMS has not yet issued the final rules and has indicated that they will not issue a final rule on Stark which a lost opportunity to improve health care delivery.
On the legislative front, AGA supports S. 2051/H.R. 4206, the Medicare Care Coordination Improvement Act, which would provide CMS with the regulatory authority to create exceptions under the Stark law for APMs and to remove barriers in the current law to the development and operation of such arrangements. The legislation would allow CMS to waive the Stark laws for physicians seeking to develop and operate APMs similar to what Congress allowed for ACOs. The legislation would allow innovative payment models developed by gastroenterologists to be implemented in the Medicare program. Unfortunately, this legislation has received little traction in Congress.
Until meaningful regulatory and legislative reform updating both Stark and AKS occur, innovative payment models must wait and gastroenterologists and other providers will remain vulnerable to these outdated regulations. You can help us advance these issues by sharing how they impact your practice. Tell us what types of value-based arrangements you would participate in and how would they improve patient care and efficacy at Lnarramore@gastro.org.
Dr. Losurdo is the AGA’s Alternate Advisor to the American Medical Association’s CPT Editorial Panel, a member of the AGA Practice Management and Economics Committee’s Coverage and Reimbursement Subcommittee and is a partner with Elgin Gastro Endoscopy, who owns and ASC, and Managing Partner and Medical Director of Illinois Gastroenterology Group/GI Alliance, Elgin, Ill.
This story was updated on 12/11/2020.
Anti-kickback statutes (AKSs) were originally enacted in 1931 to stop Great Depression–era employers from circumventing wage provisions in federal contracts. Since its enactment, AKSs’ main focus has changed and is currently aimed at the health care industry. In addition to AKSs, Stark laws were enacted over 30 years ago to address physician self-referral of Medicare patients. Both laws comprise the government’s main tools for fighting fraud, waste, and abuse.
However, AKSs and Stark laws have not been updated to keep pace with changes in how medical practices do business and care for patients.
Over the years, additional interpretation and clarification has been issued by the Department of Health and Human Services (DHHS) and the Office of Inspector General (OIG). In DHHSs’ June 1, 2012 Advisory Opinion No. 12-06 there is guidance regarding legality of anesthesia services providers’ contract with physician-owned professional corporations or limited liability companies to provide anesthesia services. Specifically, it focused on the “company model” where owners of an ambulatory surgery center (ASC) create a separate company for anesthesia services which directly contracts with anesthesia providers and charges for the anesthesia services while the ASC charges for facility fees. Anyone with specific questions may request an advisory opinion from the OIG about the application of OIG’s fraud and abuse authorities and existing or proposed business arrangements. An OIG advisory opinion is legally binding on the requesting party and DHHS, but not on any other governmental department or agency. While advisory opinions are specific to the entity that requested it and specifically states, “This opinion may not be relied on by any persons other than [name redacted], the requestor of this opinion....” It captured the attention of the medical community. The AGA has argued that this opinion should not be interpreted to mean that all company model frameworks necessarily violate the AKSs and the OIG’s Advisor Opinions FAQ states no person or entity can rely on an advisory opinion issued to someone else. However, Advisory Opinion No. 12-06 has been cited in AKS investigations ever since.
When Congress passed the Medicare Access and CHIP Reauthorization Act (MACRA) in 2015, it changed how physicians would be paid under Medicare and sought to transition physicians to a more value-based payment system. Physicians were incentivized to develop physician-driven payment models to improve efficiency and patient outcomes. However, existing Stark self-referral laws prohibit physicians from referring patients to an entity in which they have a financial interest. As a result, physician practices are unable to participate in many advanced alternative payment models. Stark laws, which have not been updated since their enactment 30 years ago, pose barriers to care coordination since they prohibit payment arrangements that consider volume or value of referrals or other business generated by the parties. These prohibitions stifle innovations in delivering care by inhibiting practices from incentivizing their physicians to deliver patient care more efficiently, because the practices cannot use resources from designated health services in rewarding or penalizing adherence to new clinical care pathways.
Congress recognized that the Stark law was a barrier to new health care delivery models. Congress, therefore, authorized the HHS Secretary to waive Stark self-referral and anti-kickback laws for accountable care organizations (ACOs). This waiver was not extended to physician-driven alternative payment models (APMs), that also need these exceptions to drive innovation in health care and to implement MACRA law as Congress intended.
AGA and the physician community have long sought to update Stark self-referral and AKSs. Last year, CMS proposed exceptions directed at value-based arrangements that would have allowed providers to participate in value-based arrangements while still protecting the Medicare program from potential abuses. Many of the changes that CMS proposed would have allowed physician practices to engage in value-based arrangements that would improve patient care and AGA provided comments on both the Stark and AKS proposed rules. However, CMS has not yet issued the final rules and has indicated that they will not issue a final rule on Stark which a lost opportunity to improve health care delivery.
On the legislative front, AGA supports S. 2051/H.R. 4206, the Medicare Care Coordination Improvement Act, which would provide CMS with the regulatory authority to create exceptions under the Stark law for APMs and to remove barriers in the current law to the development and operation of such arrangements. The legislation would allow CMS to waive the Stark laws for physicians seeking to develop and operate APMs similar to what Congress allowed for ACOs. The legislation would allow innovative payment models developed by gastroenterologists to be implemented in the Medicare program. Unfortunately, this legislation has received little traction in Congress.
Until meaningful regulatory and legislative reform updating both Stark and AKS occur, innovative payment models must wait and gastroenterologists and other providers will remain vulnerable to these outdated regulations. You can help us advance these issues by sharing how they impact your practice. Tell us what types of value-based arrangements you would participate in and how would they improve patient care and efficacy at Lnarramore@gastro.org.
Dr. Losurdo is the AGA’s Alternate Advisor to the American Medical Association’s CPT Editorial Panel, a member of the AGA Practice Management and Economics Committee’s Coverage and Reimbursement Subcommittee and is a partner with Elgin Gastro Endoscopy, who owns and ASC, and Managing Partner and Medical Director of Illinois Gastroenterology Group/GI Alliance, Elgin, Ill.
This story was updated on 12/11/2020.
Anti-kickback statutes (AKSs) were originally enacted in 1931 to stop Great Depression–era employers from circumventing wage provisions in federal contracts. Since its enactment, AKSs’ main focus has changed and is currently aimed at the health care industry. In addition to AKSs, Stark laws were enacted over 30 years ago to address physician self-referral of Medicare patients. Both laws comprise the government’s main tools for fighting fraud, waste, and abuse.
However, AKSs and Stark laws have not been updated to keep pace with changes in how medical practices do business and care for patients.
Over the years, additional interpretation and clarification has been issued by the Department of Health and Human Services (DHHS) and the Office of Inspector General (OIG). In DHHSs’ June 1, 2012 Advisory Opinion No. 12-06 there is guidance regarding legality of anesthesia services providers’ contract with physician-owned professional corporations or limited liability companies to provide anesthesia services. Specifically, it focused on the “company model” where owners of an ambulatory surgery center (ASC) create a separate company for anesthesia services which directly contracts with anesthesia providers and charges for the anesthesia services while the ASC charges for facility fees. Anyone with specific questions may request an advisory opinion from the OIG about the application of OIG’s fraud and abuse authorities and existing or proposed business arrangements. An OIG advisory opinion is legally binding on the requesting party and DHHS, but not on any other governmental department or agency. While advisory opinions are specific to the entity that requested it and specifically states, “This opinion may not be relied on by any persons other than [name redacted], the requestor of this opinion....” It captured the attention of the medical community. The AGA has argued that this opinion should not be interpreted to mean that all company model frameworks necessarily violate the AKSs and the OIG’s Advisor Opinions FAQ states no person or entity can rely on an advisory opinion issued to someone else. However, Advisory Opinion No. 12-06 has been cited in AKS investigations ever since.
When Congress passed the Medicare Access and CHIP Reauthorization Act (MACRA) in 2015, it changed how physicians would be paid under Medicare and sought to transition physicians to a more value-based payment system. Physicians were incentivized to develop physician-driven payment models to improve efficiency and patient outcomes. However, existing Stark self-referral laws prohibit physicians from referring patients to an entity in which they have a financial interest. As a result, physician practices are unable to participate in many advanced alternative payment models. Stark laws, which have not been updated since their enactment 30 years ago, pose barriers to care coordination since they prohibit payment arrangements that consider volume or value of referrals or other business generated by the parties. These prohibitions stifle innovations in delivering care by inhibiting practices from incentivizing their physicians to deliver patient care more efficiently, because the practices cannot use resources from designated health services in rewarding or penalizing adherence to new clinical care pathways.
Congress recognized that the Stark law was a barrier to new health care delivery models. Congress, therefore, authorized the HHS Secretary to waive Stark self-referral and anti-kickback laws for accountable care organizations (ACOs). This waiver was not extended to physician-driven alternative payment models (APMs), that also need these exceptions to drive innovation in health care and to implement MACRA law as Congress intended.
AGA and the physician community have long sought to update Stark self-referral and AKSs. Last year, CMS proposed exceptions directed at value-based arrangements that would have allowed providers to participate in value-based arrangements while still protecting the Medicare program from potential abuses. Many of the changes that CMS proposed would have allowed physician practices to engage in value-based arrangements that would improve patient care and AGA provided comments on both the Stark and AKS proposed rules. However, CMS has not yet issued the final rules and has indicated that they will not issue a final rule on Stark which a lost opportunity to improve health care delivery.
On the legislative front, AGA supports S. 2051/H.R. 4206, the Medicare Care Coordination Improvement Act, which would provide CMS with the regulatory authority to create exceptions under the Stark law for APMs and to remove barriers in the current law to the development and operation of such arrangements. The legislation would allow CMS to waive the Stark laws for physicians seeking to develop and operate APMs similar to what Congress allowed for ACOs. The legislation would allow innovative payment models developed by gastroenterologists to be implemented in the Medicare program. Unfortunately, this legislation has received little traction in Congress.
Until meaningful regulatory and legislative reform updating both Stark and AKS occur, innovative payment models must wait and gastroenterologists and other providers will remain vulnerable to these outdated regulations. You can help us advance these issues by sharing how they impact your practice. Tell us what types of value-based arrangements you would participate in and how would they improve patient care and efficacy at Lnarramore@gastro.org.
Dr. Losurdo is the AGA’s Alternate Advisor to the American Medical Association’s CPT Editorial Panel, a member of the AGA Practice Management and Economics Committee’s Coverage and Reimbursement Subcommittee and is a partner with Elgin Gastro Endoscopy, who owns and ASC, and Managing Partner and Medical Director of Illinois Gastroenterology Group/GI Alliance, Elgin, Ill.
This story was updated on 12/11/2020.