to induce or reward patient referrals or the generation of
business involving any item or service payable by federal
healthcare programs, such as Medicare. However, the OIG
has established a number of safe harbors that protect select
payments and business practices that otherwise could violate AKS. While OIG is proposing to design new safe harbors,
it also acknowledged that it is working to “strike the right
balance” between providing flexibility to foster innovation
and “safeguards to protect patients and federal healthcare programs.” However, OIG noted it has not made a final
determination that its proposals would ensure providers are
exempt from liability under AKS.
Both the CMS and OIG proposed rules include a number of
key definitions. Notably, the rules would define “value-based
enterprise” and “value-based arrangement.” This effort
would describe in regulation what entities would qualify—
physician practices, hospitals, post-acute providers, payers,
and other entities—for AKS safe harbors and Stark exceptions for value-based care arrangements. For example, the
regulations would define “value-based enterprise” as a
network of individuals and entities that collaborate to implement one or more value-based activities and achieve at least
one of four goals: Address the need to coordinate and manage care, improve the quality of care, appropriately reduce
costs, and transition to a model focused on the quality and
cost of care.
Those arrangements that meet the definitions would benefit
from three proposed AKS safe harbors and Stark exceptions
that protect certain in-kind and monetary arrangements. The
safe harbors and exceptions would allow for select in-kind
and monetary arrangements for those entities that assume
full financial risk and those with “substantial” or “meaningful”
downside risk. For example, those at full risk could benefit
from arrangements based on global risk adjustments, reinsurance, and risk corridors. CMS is seeking comment on
whether those at meaningful (CMS’ term) or substantial (OIG’s
term) downside risk should have access to the same tools as
those considered to be at full risk.
The AKS safe harbor from and the Stark Law exception for
“meaningful” or “substantial” downside risk would allow for
both monetary and in-kind remuneration. The OIG rule would
define substantial downside financial risk as a requirement
to repay at least 40% of any shared loses to the payer, or a
repayment requirement of at least 20% of any total loss in
an episodic or bundled payment arrangement. For Stark Law
exception purposes, CMS is proposing to define “meaningful”
downside risk as an arrangement that requires a physician to
pay the entity no less than 25% of the value of the remuneration received under the value-based activity.
The third safe harbor and exception would apply to select
in-kind remuneration for activities that are related directly
to care coordination and care management. The value-based
enterprise would need to offer at least one value-based
activity for the target population, regardless of the level of
risk. As no downside risk is required for this safe harbor and
exception, it is meant to provide some flexibility for those
participants that are not taking on financial risk. Each offer
of remuneration for the care coordination safe harbor would
be analyzed separately for compliance.
Separately, the OIG also is proposing a new safe harbor for
arrangements to support patient engagement. Providers could
offer preventive items and services, health-related technology
and patient health-related monitoring and tools, and supports
intended to address a patient’s social determinants of health.
However, the aggregate retail value of such support generally may not exceed $500 per year. While the OIG is seeking
comment on this limit, the proposal appears to recognize
the difficulty that providers face in entering a value-based
contract when beneficiaries maintain the ability to seek care
from providers outside of the value-based arrangement. Under
these safe harbors, patients will retain their ability to seek care
from any provider of their choosing. The challenge for providers
will be delivering care under value-based models that not only
have AKS safe harbors and Stark Law exceptions that vary
based on the level of downside risk, but also are designed
around a target patient population that has no obligation to
adhere to any care condition or management efforts.
Level of Risk
Essentially, CMS and the OIG are proposing increased regulatory
flexibility and access to AKS safe harbors and Stark exceptions
as a value-based entity assumes greater financial risk, similar
to how CMS provides additional waivers as providers move
into risk-based levels of the Medicare Shared Savings Program.
AMGA is concerned that the approach is based on the level
of risk an entity has agreed to accept. As we have previously
argued regarding the Medicare Shared Savings Program, the
safe harbors and exceptions should be consistent for all entities
that meet the requirements of a value-based arrangement.
Changing what tools are available as providers increase their
risk exposure does not serve as an incentive, but rather requires
providers to modify their delivery models and practice patterns.
Instead, CMS should ensure consistency in the tools and waivers
available. CMS and OIG are accepting comments on their proposals through December 31, 2019. AMGA is interested in your
comments and you are encouraged to reach out to the Public
Policy Department to provide your input.
Darryl M. Drevna, M. A., is senior director, regulatory affairs, at