HHS reviewing reforms to the Anti-Kickback Statute in addition to Stark Law

Eric Hargan told lawmakers Stark Law is largely to blame for provider consolidation. (YouTube)

The Department of Health and Human Services (HHS) is considering changes to the Anti-Kickback Statute with plans to release a request for information (RFI), Deputy Secretary Eric Hargan told lawmakers on Tuesday.

Last month, the Center for Medicare & Medicaid Services (CMS) issued a request for information seeking public input on how to reduce the burden of the Stark Law, which has created obstacles to value-based care.

That effort was part of a “regulatory sprint to coordinated care,” with CMS, the Office of Inspector General, the Office for Civil Rights and the Substance Abuse and Mental Health Services Administration. During a hearing before the House Ways and Means Subcommittee on Health, Hargan said the group plans to release another RFI on reforms to the Anti-Kickback Statute.

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“Anti-Kickback [Statute] is absolutely being looked at in this area,” he said. “Obviously the Inspector General is going to enforce Anti-Kickback Statute, but they are fully aligned with the idea of value-based care and with the notion that they need to be talking to one another and the agencies of HHS need to talk to one another to make sure they aren’t strangling innovation and new models of care that will be for the benefit of the American people.”

RELATED: CMS seeks ‘bold ideas’ as it makes reducing regulatory burden of the Stark law a top priority

Hargan said modernizing the Stark Law would drive coordinated care models, lowering costs and improving quality. He added that with more than 40 exceptions, the law has become “Swiss cheese” and left patients “on their own” to navigate the system.

He also blamed the law for incentivizing provider consolidation that some experts have pinpointed as the reason behind high cost of care.

“We have heard back from stakeholders that the consolidation in the provider community is in many cases being driven by considerations of the Stark Law,” Hargan said. “In other words, the law is actually driving a lot of the business transactions and consolidation that’s happening in the industry.”

Policy experts have frequently pushed for changes to the decades-old law. On Tuesday, hours before the House Subcommittee hearing, former HHS secretaries Kathleen Sebelius and Tommy Thompson wrote in an op-ed for The Hill that the laws need to be reformed to ease the shift to value-based care.

“Stark and anti-kickback laws are a remnant of the fee-for-service world and harm the very patients they are supposed to protect by deterring more comprehensive patient-centered, coordinated care,” the pair wrote.

In a second panel, several providers echoed those sentiments, outlining ways in which the law has limited partnerships and slowed the move towards value. Mike Lappin, chief integration officer at Advocate Aurora Health, said the system is prohibited from sharing its proprietary analytics platform with other providers to improve quality and reduce costs for high-risk heart failure patients.

Although there is an exemption for EHR platforms, Lappin said Stark Law prevents Advocate Aurora from providing physician practices access to other types of technology. 

Claire Sylvia, a partner at the whistleblower firm Phillips & Cohen LLP, was the lone voice of dissent, warning lawmakers that “blanket exceptions to fraud laws should be approached with caution,” adding that there are many examples of doctors and hospitals that engage in abusive practices.

“We’d like everyone to be appropriate, but the laws are designed for those who are not,” she said.

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