CMS' Stark, anti-kickback updates draw praise from hospitals, concern from physician groups

stethoscope, coins and calculator
Provider groups have given the Trump administration's Stark and and anti-kickback overhauls a mixed review. (Getty/mckare)

The Trump administration finalized long-planned overhauls to the Stark and anti-kickback laws Friday, and the changes are getting mixed reviews from providers.

Hospital groups including the American Hospital Association (AHA) and the Federation of American Hospitals (FAH) were optimistic about the regulatory changes, while physician groups such as the American Medical Group Association (AMGA) expressed skepticism.

The goal of updating both laws is to make it easier for providers to engage in care coordination and value-based care programs without running afoul of the statutes. In a statement, AHA Executive Vice President Tom Nickels commended the Department of Health and Human Services (HHS) for its work to ease these barriers.

"Outdated regulations created unnecessary roadblocks to the kind of collaboration and coordination that enables caregivers to meet all of their patients’ health care needs, whether in the hospital, the doctor’s office or their own homes," Nickels said. "The changes finalized should help to replace numerous waivers of these same regulations needed to experiment with collaborative and innovative care and remove 'impediments to robust, innovative programs' noted in a 2016 report from the Department to Congress."

RELATED: White House finalizes overhauls of Stark, anti-kickback statutes

FAH CEO Chip Kahn also praised the rule in a tweet, saying the policy updates "enable doctors and hospitals to develop innovations in patient care and cost control."

Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma said that as the agency aimed to gauge the biggest barriers to participation in value-based care, compliance with these two laws were a frequent source of complaints.

CMS' regulatory overhaul includes new safe harbors for the anti-kickback law and new exemptions to the Stark Law to allow for greater flexibility, For example, the regulations clarify how medical device and durable medical equipment companies can participate in care coordination arrangements for digital health platforms.

The agency also made some changes in response to provider concerns, such as lowering the level of downside risk necessary to qualify for the new anti-kickback safe harbors.

Darryl Drevna, senior director of regulatory affairs at AMGA, said in a statement to Fierce Healthcare that while the final rules "demonstrate a willingness to help providers move toward value-based care," the risk requirements will still be a hard sell, even at a lower rate.

"AMGA members need a consistent set of rules that do not change based on the level of risk," Drevna said. "Requiring providers to adapt to new clinical, administrative and financial processes to satisfy a new safe harbor does not serve as an incentive to enter into sophisticated value-based arrangements.”

Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association, said in a statement to Fierce Healthcare that while the group can appreciate the efforts to update both laws, both have become too cumbersome "to the point where it is beyond comprehension to the average physician or practice administrator."

While the regulatory changes are welcomed, the rules could have gone further to ease burdens on physicians—and, to truly provide relief, Congress will need to step in, Gilberg said.

"We recognize HHS had the difficult task of implementing this overly complicated law and has limited ability to act within its statutory authority," Gilberg said. "Efforts to improve the Stark Law’s regulatory framework will be undercut by the law’s strict liability regime, disproportionate penalty provisions, and vexing construct. We continue to believe there is a significant need for Congressional action."

Policy experts at the American Medical Association were still processing the meaty regulations as of Monday afternoon, but in a letter (PDF) to the Trump administration in December 2019 the group expressed similar concerns about financial risk requirements, warning it could drive further industry consolidation.