Though eliminating the Stark and anti-kickback statutes would require an act of Congress, there’s plenty the government can do with regulation to provide some much-needed clarity.
Crafted decades ago, these laws were built before value-based pricing and purchasing was a consideration, which is why they post notable roadblocks now, said Meena Datta, global co-leader of the healthcare practice at Sidley Austin LLP law firm.
For example, safe harbors for drug discounts were built on a fee-for-service approach, and thus on a simpler definition.
“The exceptions and safe harbors were written at a time when the concept of a discount was pretty simple, and not based on patient outcomes or population outcomes,” Datta said.
The Trump administration has taken aim at both statutes of late as part of its ongoing efforts to ease administrative burdens and advance the growth of value-based care.
The Department of Health and Human Services Office of Inspector General just issued a request for information on solutions to address issues with anti-kickback laws, while the comment period on a similar request from the Centers for Medicare & Medicaid Services for the Stark Law just closed.
Both comment periods offer a significant opportunity for providers to weigh in on the legal barriers they face in embracing value-based contracting. A lack of legal certainty on how value-based models should be structured to prevent providers from running into problems with these laws can prevent some from participating at all, Datta said.
“There are some in the industry who say, ‘Look, CMS hasn’t made up its mind,’” she said. “Value-based contracting not being handled efficiently from a legal perspective can lead some to say, ‘Let’s just do it the traditional way and take legal confusions off the table.’”
In addition to offering providers an opportunity to push for greater clarity around value-based models, Datta said that the anti-kickback RFI’s comment period also marks the beginning of a crucial conversation on how to ease barriers to care coordination.
HHS has said that re-examining both Stark and anti-kickback regulations is part of its “sprint” to more coordinated care. Secretary Alex Azar has also teased that additional steps to ease coordination are coming down the pike, including a look at the Health Insurance Portability and Accountability Act, which in its efforts to protect patient data can make it harder for providers to share information.
One tension point to watch, Datta said, is how the RFI and the responses on rebates intersect with the administration’s own plans on drug rebates. HHS submitted a proposed rule to the Office of Management and Budget in mid-July—where it has sat since—that implied it was considering a significant overhaul of the current drug rebate structure between pharmaceutical companies and pharmacy benefit managers.
While what exactly they’re considering has yet to be revealed, Datta noted that some within the industry—including Azar himself—have blamed the rebate structure as one of the main reasons that drug prices are on the rise. Rebates, however, can also play a central role in how value-based contracts are built, she said, so that disconnect will be an issue in this arena to watch.
“One of the things we will have to watch for is how this is resolved in a policy manner,” Datta said.