Proposed Anti-Kickback Statute "Care Coordination Arrangements" Safe Harbor: Implications for Remote Patient Monitoring and Care Management Services
Update: Head to our resource page “Responding to COVID-19: Resources for Telehealth and Remote Patient Monitoring”
Read our latest blogs on this topic: “Proposed Anti-Kickback Statute “Patient Engagement and Support” Safe Harbor: Implications for Remote Patient Monitoring and other Care Management Services Vendors” and “HHS Proposes New Safe Harbors Under the Anti-Kickback Statute and The Stark Law.”
On October 9, 2019, the Department of Health and Human Services (DHHS), Office of Inspector General (OIG), and the Centers for Medicare and Medicaid Services (CMS) released a pair of proposed rules seeking to add or change certain safe harbors or exceptions to the Anti-Kickback Statute (AKS), Physician Self-Referral Prohibition law (Stark), and the Civil Monetary Penalty (CMP) law. The proposed changes to AKS, Stark, and CMP are intended to facilitate a transition to value-based healthcare by reducing the regulatory burdens currently associated with many value-based arrangements and care coordination efforts. For a general overview of the proposed rules, read our previous blog post here.
The proposed changes to the current healthcare legal and regulatory landscape are described in over 700 pages of text. If even a portion of the revisions are finalized, the implications for various stakeholder groups within the healthcare industry will be very significant. Nixon Law Group is breaking down these implications for you through a series of blog posts to help you understand what might be in store for your healthcare company or medical practice. In this article, we focus on OIG’s proposed Care Coordination Arrangements safe harbor to AKS and discuss how this new safe harbor may affect vendors of care management services such as Remote Patient Monitoring, Chronic Care Management services, Transitional Care Management services, and Behavioral Health Integration services. We’ll begin with a brief overview of the AKS and CMP to set the stage.
What is the Anti-Kickback Statute?
The AKS makes it a criminal offense for any person to knowingly and willfully solicit, receive, offer, or pay any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program, including state Medicaid programs (FHCP). For purposes of AKS, “remuneration” can be anything of value, tangible or intangible, transferred directly or indirectly, overtly or covertly, in cash or in kind. A “referral” includes conduct intended to induce the purchasing, leasing, ordering, or arranging for any good, facility, service, or item paid for by a FHCP.
What is the Civil Monetary Penalty law?
The CMP authorizes OIG to impose civil monetary penalties of up to just over $10,000 per violation against any person or entity that offers or transfers remuneration to a beneficiary of a Medicare or Medicaid program that the person or entity knows is likely to influence the beneficiary’s selection of a particular healthcare provider, practitioner, or supplier of an item or service for which Medicare or Medicaid pays in whole or in part. For purposes of CMP, “remuneration” means any item or service of value that is worth more than a nominal value ($15.00 per item or $75.00 per patient over the course of a year).
What are Safe Harbors?
Both the AKS and the CMP include certain exceptions or “safe harbors” which can exclude an otherwise impermissible arrangement between two or more parties from enforcement of the laws. The safe harbors are set forth in federal regulations, and each individual safe harbor includes a specific set of requirements that must be met in order for the arrangement to be protected. These safe harbors often guide the structuring of business model arrangements that would otherwise potentially violate the AKS and/or the CMP.
In their current form, the AKS and the CMP create significant barriers to transitioning to value-based care and payment models. Today, healthcare providers and healthcare companies who want to enter into innovative business arrangements to facilitate coordinated care face the risk of incurring civil and criminal penalties under the AKS for doing so, even when the goal of such arrangements is improving patient outcomes and reducing healthcare costs. Plus, under current law, many incentives to beneficiaries aimed at increasing patient engagement would constitute improper “beneficiary inducements” under the CMP. This legal and regulatory landscape makes it difficult for healthcare providers and innovators who want to incentivize patients to be more active participants in their health and healthcare as a means of improving patient care and lowering costs.
In 2018, HHS launched the “Regulatory Sprint to Coordinated Care” with the intent of reducing the regulatory burden associated with coordinating care. Now in 2019, OIG has proposed several new safe harbors along with updates to existing safe harbors to allow for business arrangements that improve quality of care, health outcomes, and efficiency in healthcare delivery. The proposed Care Coordination Arrangements safe harbor may have significant implications for the business models implemented by RPM and CCM vendors going forward, as described below.
Remote Patient Monitoring, Chronic Care Management, and the proposed ”Care Coordination Arrangements” Safe Harbor
The Care Coordination Arrangements safe harbor allows for in-kind remuneration for services and infrastructure within business arrangements that improve quality, health outcomes, and efficiency. If finalized, this proposed safe harbor would protect in-kind (non-monetary) remuneration among the participants in a “Value-Based Enterprise” (VBE) as part of a “value-based arrangement” for the purpose of improving care coordination for a particular target patient population. This in-kind remuneration might include sharing staff (such as care coordinators or clinical staff for monitoring patient data) and providing technology (such as Remote Patient Monitoring platforms, electronic health record (EHR) software, or health data analytics tools). Notably, this is a significant departure from current law, which requires that such arrangements fit into the personal services and management contracts safe harbor. The existing safe harbor is notoriously inflexible and difficult to deploy – requiring, for example, that parties establish the exact cost of services and when they will be provided over a full year’s time.
As envisioned in the proposed rule, a Value-Based Enterprise may consist of a network of two or more participants, which may include providers, suppliers, clinicians, and “others,” who agree to collaborate to improve care coordination, increase efficiencies, and improve quality and outcomes for a population of patients. VBE participants may enter into gainsharing/shared savings arrangements within the VBE entity. As these new VBEs form, they are likely to turn to digital health vendors, including RPM and/or CCM vendors, for tools and services that can help them reduce overall cost of patient care and improve patient outcomes. In fact, OIG specifically notes that it expects to see an increase in remote monitoring and care management services associated with care delivery through VBEs under the Care Coordination Arrangements safe harbor. The proposed rule also suggests that RPM and CCM vendors, along with other digital health companies, may be eligible to participate in VBEs, potentially opening up the opportunity for these non-provider participants to share in any savings achieved by the VBEs.
The proposed rule sets forth several important requirements that would apply in order to satisfy the Care Coordination Arrangements safe harbor and successfully avoid violating AKS. Those proposed requirements are as follows:
The proposed safe harbor is only available to a “value-based enterprise” (VBE) and its participants as part of a “value-based arrangement” as defined by OIG;
The parties must identify a target patient population which the value-based arrangement is designed to serve;
The parties must establish one or more evidence-based outcome measures against which the recipient of remuneration will be measured and which the parties reasonably anticipate will advance the coordination and management of care of the target patient population;
The value-based arrangement must be commercially reasonable taking into account the arrangement itself and all other value-based arrangements within the VBE;
The value-based arrangement must be set forth in a written agreement;
All remuneration transferred between the parties must be in-kind (non-monetary), cannot be gift cards, cash equivalents, or ownership/investment interests, and cannot take into account the volume or value of referrals outside of the target patient population;
All remuneration must be transferred within the VBE – it cannot come from or flow to entities outside the VBE;
The recipient entity receiving remuneration must contribute at least 15% of the offering entity’s cost of the remuneration;
The arrangement must be directly connected or have a “close nexus” to the coordination and management of care of the target patient population;
The parties cannot market or recruit patients (but patient education is permissible);
The VBE must monitor and assess, at least annually, the arrangement to ensure goals are met and progress is made;
The parties cannot divert, resell, or use remuneration for an unlawful purpose; and
The parties must make materials and records available to the HHS Secretary upon request.
While OIG specifically notes that it intends for remote patient monitoring and other care management services vendors to be eligible participants in a VBE, OIG also proposes excluding device manufacturers and several other categories of vendors as participants. OIG is concerned that device manufacturers might disguise improper payments intended as kickbacks under the proposed safe harbor if eligible to participate in VBEs and is soliciting comment on whether and how to address this concern in the final rule.
Key Takeaways
The new proposed Care Coordination Arrangements safe harbor allows non-monetary remuneration among participants of a Value-Based Enterprise
This remuneration may include sharing of staff, technology, and other resources previously prohibited by the Anti-Kickback Statute
Vendors of care management services such as Remote Patient Monitoring, Chronic Care Management, Transitional Care Management, and Behavioral Health Integration services may be allowed to be participants in a VBE, and therefore may enter into gainsharing or shared savings arrangements within the VBE.
Opportunity for comment: Make your voice heard!
OIG is soliciting comments on the proposed rule until December 31, 2019. The stakes are high, and it is now more important than ever for stakeholders to participate in this opportunity to change the healthcare regulatory landscape. Earlier this year, OIG proposed several updates to safe harbors related to the pharmaceutical industry but later withdrew the proposal after receiving mixed feedback from stakeholders – signaling that OIG takes stakeholder feedback seriously and will respond accordingly. Understanding the current proposals and submitting informed feedback to OIG has the potential to impact a new framework in the immediate future.
Stay tuned for the next article in this series on the proposed Patient Engagement and Value-Based Arrangements safe harbors and please contact us with questions!
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