White House finalizes overhauls of Stark, anti-kickback statutes

A stethoscope and paper money.
The Trump administration has finalized its overhaul of the Stark and Anti-kickback laws. (Getty/utah778)

The Trump administration has signed off on long-awaited overhauls to the Stark and anti-kickback laws, which aim to make it easier for providers to enter value-based care arrangements.

The two rules rethink safe harbors under the anti-kickback statute and new exemptions to Stark to add greater flexibility for care coordination while avoiding potential fraud allegations. Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma said the agency heard frequent complaints from providers about how much of a burden the laws posed to their ability to participate in value-based care.

“This rule is emblematic of the Trump Administration’s commitment to addressing longstanding problems and developing innovative solutions to outdated regulations that add administrative costs and rob health care providers of time from patients,” Verma said in a statement. 

“When CMS launched our nationwide tour to kick off our Patients Over Paperwork initiative in 2017, one of the top things we heard from front-line providers was how the outdated Stark regulations impeded them from moving toward a more value-driven reimbursement model. Our team listened and took action, and today’s final rule is the historic result," she added.

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An example of the updated regulations in action, the Department of Health and Human Services (HHS) said, is that it clarifies how medical device and durable medical equipment companies can enter care coordination arrangements involving digital health platforms.

In addition, the final rules lower the level of downside risk necessary to qualify for the new safe harbors, in response to concerns from providers. The regs also include a provision that would allow hospitals to share cybersecurity tools with providers that have fewer resources, a much-requested addition.

Both rules will go into effect Jan. 19.

“When I launched the Trump Administration’s agenda for value-based transformation of healthcare in 2018, I identified regulatory reform to support coordinated care as one of the four key strategies for delivering a system that pays for outcomes rather than procedures,” said HHS Secretary Alex Azar in a statement. “Today, we’ve completed historic reforms to regulations that have stood in the way of creativity and innovation by American healthcare providers for far too long."

"These new regulatory reforms will mean better care, including innovative arrangements with digital technology that may help patients receive care during the COVID-19 pandemic," Azar said.

The rules dropped alongside two major drug pricing regulations that finalize pharmacy benefit managers' hated rebate rule and the most-favored-nation rule as the administration scrambles to codify as many regulations as possible before Inauguration Day.