‘Break out of the silos,’ remove Stark barriers says AHA

The American Hospital Association (AHA) is urging lawmakers to adopt a single broad exception to federal fraud and abuse laws in response to queries on how to improve the physician self-referral (Stark) law under new value-based payment models. In a letter to the House Ways and Means Committee, the AHA claims that, as the reimbursement models are moving to value-based from volume-based, enforcement mechanisms are still rooted to the volume-based approach.

According to the AHA, the Stark law is not the only legal barrier that needs to be addressed. Hospitals, physicians and other health care providers must “break out of the silos” and collaborate as teams to achieve the efficiencies and care improvement goals of the new payment models. To accomplish that goal, the AHA stressed the need for a legal safe zone across the fraud and abuse laws (Stark, anti-kickback and certain civil monetary penalties (CMPs)).

As such, the AHA views Stark as poorly suited to a value-based payment system. The law should not be the central point of oversight for value-based payments, as it was designed to keep hospital and physicians apart through micro-managing compensation arrangements on a strict liability basis.

The AHA supports the creation of an exception under the anti-kickback statute for hospital-physician integrated arrangements designed to achieve the goals of team-based care. In addition, there should be protection for shared savings and incentive programs, as well as any arrangement start-up or support contribution. Any arrangement covered by the exception would be deemed compliant with the Stark law and applicable CMPs.

Moreover, the AHA stated that any requirement governing the form rather than the substance of an arrangement is a technical rather than substantive requirement. Thus, Stark should require that enforcement take into account mitigating factors when a violation does occur. These factors should include: (1) whether the violation is technical or substantive; (2) whether the parties’ failure to meet all the prescribed criteria of an applicable exception was due to an innocent or unintentional mistake; (3) the corrective action taken by the parties; (4) whether the services provided were reasonable and medically necessary; (5) whether access to a physician’s services is required in an emergency situation; or (6) whether the Medicare program suffered any harm beyond the statutory disallowance.