Health Update (October 16)
Healthcare headlines were scant this week, as Congress was out for its recess and set to return next week. House Ways & Means Chairman Richard Neal (D-MA) announced that the committee will hold a hearing next week on House Speaker Nancy Pelosi’s (D-CA) drug pricing bill (H.R. 3). Additionally, the Center for Medicare and Medicaid Services (CMS) and the Office of the Inspector General (OIG) released proposals with changes to Stark Law and anti-kickback statutes.
CMS & OIG Propose Changes to Stark
HHS released long-awaited proposals this week to change the physician-self referral and anti-kickback statute regulations aimed at easing providers’ participation in value-based pay models. Those proposals include new, permanent exceptions to the Stark Law for value-based pay arrangements within and outside Medicare and a new safe harbor under the anti-kickback statute for certain incentives beneficiaries can access through CMS demonstrations. Changes to both programs are part of HHS’ so-called Regulatory Sprint To Coordinated Care, which also includes proposed changes to the privacy scheme that protects patients’ substance use disorder treatment records and changes to the Health Insurance Portability and Accountability Act that are still in the works, according to HHS Deputy Secretary Eric Hargan.
CMS touted its proposed rule in a fact sheet as a “comprehensive package of proposed reforms to modernize the regulations that interpret the Stark Law while continuing to protect the Medicare program and patients from bad actors.” The agency says the changes would support the evolution of the health care system to value-based pay. The proposal would create permanent exceptions to Stark Law prohibitions in order to permit value-based arrangements, whether those arrangements are set up through Medicare or some other payer. The rule says CMS expects most value-based arrangements would coordinate and manage patients’ care, but the agency doesn’t propose to limit the kind of compensation arrangements that would qualify as value-based arrangements to only those setups. CMS said that due to program integrity concerns, it is considering whether to exclude drug makers, durable medical equipment makers and distributors, pharmacy benefit managers, wholesalers and distributors from the list of those who can participate in excepted value-based arrangements.
The OIG proposed three new anti-kickback statute safe harbors for remuneration — incentives that could include money or other items of value — exchanged between participants in a value-based arrangement that coordinates and manages patients’ care: one for care coordination arrangements aimed at improving quality, outcomes and efficiency; one for arrangements with substantial downside financial risk; and one for those with full financial risk. OIG says in a fact sheet the safe harbors vary not only by risk level, but also by the types of incentives that are protected, and the types of safeguards included as safe harbor conditions. OIG also proposes a new safe harbor for certain tools and support provided to patients. Another proposal would create a safe harbor for certain remuneration provided by those connected to a CMS-sponsored demo, which OIG says should reduce the need for separate fraud and abuse waivers for new CMS models. OIG also proposes to codify certain exceptions for Accountable Care Organizations’ beneficiary incentive programs and to make changes to the existing safe harbor for personal services and management contracts in order to add flexibility for outcomes-based pay and part-time arrangements. Like the proposed changes to the Stark Law regulations, the OIG also includes changes to allow for donations of cyber security technology and services through a new safe harbor. The office also proposes changes to the existing safe harbor for electronic health records to add cybersecurity technology protections, update interoperability provisions and make that safe harbor permanent. OIG also proposes to change the local transportation safe harbor to expand mileage limits for rural areas and for beneficiary transportation from inpatient facilities after a discharge. In addition, the office proposes changes to a safe harbor on warranties, as well as to allow for telehealth technology provided to certain in-home dialysis patients. 
On Thursday, October 17, 2019, the House Committee on Ways & Means will hold a hearing entitled, “Investing in the U.S. Health System by Lowering Drug Prices, Reducing Out-Of-Pocket Costs, and Improving Medicare Benefits.” Ways and Means will be the final House committee of jurisdiction to hold a hearing on Pelosi’s government drug price negotiation plan. Expect W&M and E&C to hold markups of H.R. 3 in the coming weeks. A link to the hearing can be found here. On Wednesday, October 16, 2019, the House Energy & Commerce Subcommittee on Health will hold a hearing entitled, “Legislation to Reverse the Youth Tobacco Epidemic.” A link to the hearing can be found here.
 Stein, Michelle. “CMS, OIG Propose Changes To Stark, Anti-Kickback Regulations.” Inside Health Policy. 9 Oct. 2019. https://insidehealthpolicy.com/daily-news/cms-oig-propose-changes-stark-anti-kickback-regulations