CMS softens safe harbors, exceptions to promote value-based care

AMARILLO, Texas - CMS's recent reforms to the Anti-Kickback Statute and the Stark Law will benefit HME providers, but “not a whole lot,” says healthcare attorney Jeff Baird.

The agency in late November published two final rules, culminating a years-long process of modernizing regulations to better support coordinated and value-based care, but they mostly impact physicians and hospitals.

Baird, chairman of the Health Care Group at Brown & Fortunato, drilled down to how the reforms impact HME providers, specifically.

Anti-Kickback Statute

One new safe harbor under the Anti-Kickback Statute that will impact HME providers is the “care coordination” safe harbor, which now allows providers to receive or provide something of value to another provider without violating the Anti-Kickback Statute, if certain conditions are met, Baird says.

Other safe harbors that will impact HME providers, he says: the “cybersecurity” safe harbor, which now allows providers to donate certain technology and services “that are necessary” to referral sources; and the “personal services and management contract” safe harbor, which now allows providers to set a methodology, but not necessarily a specific compensation, for contracts in advance.

“We've had this confluence of forces coming together, where value-based care, for that to be successful, providers have to work together,” Baird said. “So you have value-based care pushing providers to work together, but at the same time, you have the Anti-Kickback Statute saying if you work together and share something of value, it's a kickback. That is a problem. You've got two opposing forces. Finally, they've come out and said, 'OK, let's relax the statute.'”

Stark Law

There are three new exceptions under the Stark Law and only one of them really applies to HME providers, Baird says. This exception allows providers to spend up to $5,000 to a physician for services rendered in a 12-month period.

“It's important that (the services) can't be made up,” he said. “But if XYZ wants to pay up to $5,000 to Dr. Jones for legitimate services, there aren't going to be any questions. If XYZ pays more than $5,000, those may be questioned. There's a risk CMS may come in and say, 'Wait, why did you pay more than $5,000,' and you'll need to justify what the physician has done for you. But basically, you've got real protection.”

Baird noted that there is a modification to an existing exception that applies to HME providers. CMS has modified the definition of commercially reasonable to say that an arrangement between an HME company and a physician is commercially reasonable if it furthers the legitimate business purposes of those two entities, but it doesn't have to produce a profit.

“It can be at a loss for one or both parties, as long as patients are being taken care of,” he said.

“It used to be that you couldn't have a loss. You had to break even or make a profit.”