Medical Groups Worry About Risk in Anti-Kickback, Stark Law Reform

Tying Anti-Kickback and Stark Law reform to the level of financial risk providers assume creates more complexity and burden and could impede the transition to value-based care for physicians, advocacy organizations representing medical groups recently stated.

Comment letters from the American Medical Group Association (AGMA) and the Medical Group Management Association (MGMA) to CMS and Office of the Inspector General (OIG) called for changes to proposed Anti-Kickback Statute and Stark Law reforms that would create safe harbors for providers participating in value-based care models.

CMS and OIG proposed the new safe harbors late last year in response to industry concerns that Medicare fraud and abuse laws did not align with new value-based care models that promote care coordination and special compensation agreements.

Both agencies proposed safe harbors that providers in full financial risk, substantial financial risk, and care coordination arrangements. But AMGA and MGMA voiced their concerns with this approach to modernizing the Anti-Kickback Statute and Stark Law.

The proposed safe harbors would require that recipients contribute at least 15 percent of the cost of the in-kind remuneration. Both MGMA and AGMA strongly urged OIG to eliminate the threshold because it would add complexity and may be cost prohibitive for physicians. In addition, MGMA suggested that the limited remuneration exception should also be increased past the $3,500 threshold.

Medical groups have struggled to adopt downside financial risk. An AMGA survey released in May 2019 showed that risk-based revenue among groups and integrated delivery systems accounted for just 56 percent of federal and 28 percent of commercial revenues. This could make it difficult for medical groups to leverage the proposed safe harbors and transition to value-based care models with substantial financial risk, the organizations stated.

There are additional barriers that must be addressed before providers will be able to work with stakeholders and utilize value-based care, AMGA added. The organization stressed that there must be an expansion to commercial risk products and administrative claims data from payers. Issues with financial benchmarking, data submission and reporting standards, and risk adjustment methodologies must be addressed as well to encourage medical groups to make the transition to risk-based models.

The organization also urged CMS to add pharmaceutical manufacturers, durable medical equipment manufacturers, distributors, suppliers, and laboratories to the “value-based entity participants.” In addition, AMGA disagreed that safe harbors should be limited to only those with chronic conditions, as the restriction would force models to be based on specific conditions and may prevent providers from developing a value-based system that addresses a variety of conditions. 

Furthermore, MGMA emphasized that they are “convinced that CMS does not have adequate authority to significantly simplify or fix the Stark Law’s compensation provisions.” They urge CMS to work with congress on developing workable legislative solutions to achieve regulatory relief. 

AMGA voiced their concern that the OIG’s proposal may create confusion and burden for the provider community. They emphasized that they need clear and workable guidance before they can rely on the proposed safe harbors. This includes alignment of OIG and CMS definitions so that Stark Law exceptions do not leave physicians in confusion.

Similarly, MGMA also expressed the same worry and recommendation to move further towards policy alignment, which is important in accommodating value-based payment reforms. In addition, policy alignment will take away the need for providers to look for fraud and abuse waivers and ensure clarity on which activities are permitted as part of the CMS model.

In addition to both AMGA and MGMA reacting to the outdated AKS rules, AHA released their own comments and recommendations just last week in a letter to the OIG. 

Although the AHA openly supported the proposed risk-based safe harbors because of the smooth transition they promote, the hospital group also agreed with AMGA and MGMA and urged OIG to parallel Stark Law exceptions proposed by CMS.

“The proposed rule would take away flexibility and would impose requirements so voluminous and perspective that the safe harbor would be of little use to entities seeking to collaborate to deliver healthcare,” AHA stated.

Echoing AMGA and MGMA comments, the AHA also recommended that the 15 percent threshold for providers be reduced or completely eliminated. The association also did not agree with having a target population because it would only further restrict participants’ ability to adapt value-based care models for their communities. 

“A fundamental rethinking of the non-risk based value-based arrangement safe harbor, along with the other refinements described in these comments, are needed to make AKS regulations a facilitator, rather than impediment, to a value-based system,” the AHA stressed.