AHA: Anti-Kickback Changes Too Narrow to Promote Value-Based Care

HHS’ Office of Inspector General (OIG) is taking steps toward “much needed reform” of Medicare fraud laws, but more can be done to remove the value-based care barriers presented by outdated Anti-Kickback Statute (AKS) rules, according to the American Hospital Association (AHA). 

“The AHA appreciates OIG’s intention in the proposed rule to enable and support the movement toward a more effective, more efficient, and more patient-centered healthcare system but much work remains,” the association emphasized in a letter to OIG. “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.” 

Earlier this year, OIG proposed three new AKS safe harbors for organizations participating in value-based care models. Specifically, the safe harbors would protect providers in full financial risk, substantial financial risk, and care coordination arrangements, with greater flexibilities granted to those taking on more risk.

AHA openly supported the proposed risk-based safe harbors because they will allow for a smoother transition to patient-centered care. But the association strongly urged OIG to complete the suite of value-based safe harbors and match the strength of the parallel Stark Law exceptions proposed by CMS at the same time. Few physicians and other healthcare professionals have the appropriate financial resources to comply with the requirements needed to qualify for proposed AKS safe harbors, the association argued. 

“The proposed rule would take away flexibility and impose requirements so voluminous and prescriptive that the safe harbor would be of little use to entities seeking to collaborate to deliver better care,” the letter stated. “We urge OIG to fundamentally rethink and revise this proposed safe harbor.” 

The adoption of risk-based value-based care models is still low. 

According to AMGA’s Fourth Annual Risk Survey, risk-based revenue from medical groups and integrated delivery systems represented 56 percent of federal revenues and 28 percent of commercial revenues in 2018. Providers are moving to risk, but challenges remain, including a lack of access of administrative claims data, limited infrastructure, and change management issues.

These challenges are prompting many providers to push out the implementation of risk-based contracts. One survey of healthcare leaders found that risk-based models are still three to five years away for most organizations.

Nevertheless, the federal government is pushing providers to assume financial risk. For example, CMS recently finalized an overhaul of the Medicare Shared Savings Program, which requires accountable care organizations (ACOs) to participate in a risk-based track sooner.

Policymakers may be priming Medicare fraud laws for a future in which providers assume downside risk in value-based care models. But not all providers are there yet, AHA stressed. Therefore, proposed changes to the AKS should account for all types of value-based care models to promote greater participation in arrangements that reward providers for improved care quality and/or reduced costs.

 AHA encouraged OIG to broaden the safe harbor in order to allow compensation which will further advance value-based care. The association also recommended that the requirement that recipients share at least 15 percent of the cost be reduced or completely eliminated. 

Risk-based arrangements are an important part of the movement towards value-based care, so the AHA fully supports the proposal to create two new AKS safe harbors for risk-based value-based arrangements. But the association encouraged OIG to adopt lower thresholds for “substantial downside financial risk.” 

Although AHA endorsed the proposed definition of value-based activity, the association urged OIG to modify some aspects in order to provide flexibility to the proposed safe harbors. There is concern that regulatory text could be misread as prohibiting safe harbor protection for value-based care models in which payments may depend partly on referrals within the network. Because of this, rewarding physicians for utilizing those network participants is critical. 

Notably, AHA identified the proposed safe harbor for care coordination as a challenge because it would be significantly more narrow and would unlikely incentivize innovation in payment models beyond what is already permitted under the AKS. This leads to less protection for value-based arrangements that are not tied to a physician’s shared risk of losses. And physicians would be forced to share at least 15 percent of the cost of protected remuneration, which would halt the progression of value-based care.

The safe harbor would have to meet the requirements of reasonableness, fair market value, volume and value of referrals, which are obstacles to the value-based system. The requirements would be inconsistent with compensation based on achievement which are usually tied to changes in referral patterns. 

“We seek confirmation that such arrangements would not be considered a prohibited payment for referral,” AHA wrote in the letter.

In addition, OIG should not adopt additional limitations on what is an acceptable target patient population. This would only further restrict participants’ ability to adapt value-based care models for their communities, AHA argued.

Furthermore, the AHA stood behind a new safe harbor for patient engagement tools that was proposed to enhance care and assist patients overcoming societal obstacles, as well as protect frontline providers in rural or underserved areas even if they are not part of a value-based entity. But the association strongly urged that OIG does not distinguish between certain categories of social determinants of health (SDOH) because that would risk excluding tools and supports that many patients could benefit from. 

Various transportation services are critical for those in underserved communities. The AHA supported the revisions to the safe harbor for local transportation and encouraged OIG to extend the policy to cover patient transportation from one facility to the next. The safe harbor should also protect transportation to services that assist with SDOH even if the services do not constitute medical care.

“We commend OIG for recognizing the need to provide assistance to patients to achieve care coordination and strongly support the proposed safe harbor for patient engagement tools and the expansion of the transportation safe harbor,” the press release stated.