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  • CMS, HHS Propose More Exceptions to, Safe Harbors in Self-Referral Law

    The so-called "Stark law" that bars physicians from referring Medicare patients to services in which the physician has a financial interest turns 40 this year, and the US Department of Health and Human Services (HHS) thinks it's time to bring some of its provisions up-to-date in ways that accommodate alternative payment models (APMs). The proposals that have emerged are a mixed bag, some of which were opposed by APTA because of how they may weaken the self-referral law and create an uneven playing field for physical therapists (PTs).

    The changes surfaced as 2 sets of plans, one from the HHS Office of the Inspector General (OIG) and one from the Centers for Medicare and Medicaid Services (CMS). The CMS changes are aimed at decreasing regulatory burden and promoting coordinated care and APMs, while the HHS OIG proposals are focused on creating safe harbors in the law's anti-kickback provisions. In a fact sheet, CMS describes the proposals as including "a carefully woven framework of safeguards." But those safeguards don't touch APTA's main criticism of the Stark law—that it contains too many loopholes around the provision of "in-office ancillary services" (IOAS) that include physical therapy.

    The IOAS loophole in Stark has been a major focus of the association's advocacy efforts for years. As lawmakers on Capitol Hill were mulling over possible changes to Stark in 2018, APTA representatives met with federal legislators and staff, and provided comments to the US House of Representatives Ways and Means Health Subcommittee advising a caution around relaxing self-referral prohibitions. Later that year, the association provided comments to a CMS request for information on reform of Stark and created customizable letters for members to submit to add their individual voices to the effort. The APTA message: the uneven playing field created by the IOAS exceptions make it difficult for small and medium-sized PT-owned practices to meaningfully participate in APMs.

    In the end, the proposals released by CMS and OIG contain both understandable and potentially problematic elements. Among the proposed changes:

    New permanent exceptions to Stark for certain value-based arrangements: Participants in a "value-based enterprise" (VBE) would be able to access an exception to Stark, as long as the VBE meets requirements that it operates as a legitimate arrangement intended to achieve a value-based purpose.

    Exceptions for "non-abusive, beneficial arrangements between physicians and other healthcare providers": For example, hospitals would be able to donate cybersecurity technology to providers, and allowances would be made for data-sharing between primary care physicians and specialists.

    Safe harbors for certain types of relationships and activities: The HHS proposal offers protection from Stark for activities related to cybersecurity, electronic health records, warranties, and local transportation and telehealth for in-home dialysis, in addition to a safe harbor for a number of relationships between eligible participants in value-based arrangements.

    CMS is also soliciting comments about the role of price transparency in the Stark Law—specifically, whether to require that providers present patients with cost-of-care information for an item or service at the point of referral. The agency believes price transparency could empower patients to have conversations about costs with their physicians at the point of care and serve as an additional safeguard during referral. To that end, APTA will remind CMS, as it has in the past, that the IOAS exception creates a conflict of interest that can prevent patients from making well-informed decisions about their care. In particular, APTA will advocate for CMS to, at the very least, impose disclosure requirements around physician-owned physical therapy that are similar to those used for imaging—namely, that physicians must notify patients in writing that they are permitted to receive the service elsewhere at a potentially lower cost.

    "CMS' move toward APMs and other value-based care approaches is laudable, and all obstacles to that evolution should be examined," said Kara Gainer, APTA's director of regulatory affairs. "But at the same time, the dangers of conflict-of-interest should never be ignored, particularly if a system builds in the potential for conflicts that prevent providers from fully participating in these important new APMs. These proposals contain some sensible, much-needed provisions but may not go far enough in promoting fairness and patient choice."

    APTA will submit comments in response to both proposals. APTA also will continue to advocate for changes that close loopholes around IOAS, including adoption of the Promoting Integrity in Medicare Act (PIMA) of 2019 (HR 2143), a bill that seeks to end the IOAS exception.