Congress should adopt a single broad exception to federal fraud and abuse laws for financial relationships designed to foster collaboration, efficiencies and improvements in health care, the AHA last week told leaders of the Senate Finance and House Ways and Means committees.

In a Jan. 29 letter to committee leaders, the AHA took aim at the so-called “Stark” law, anti-kickback statute and certain civil monetary penalties that get in the way of hospitals’ and other caregivers’ efforts to work together to promote high-quality, patient-centered care.

“Hospitals, physicians and other health care providers must break out of the silos of the past and work as teams to achieve the efficiencies and care improvement goals of the new payment models,” wrote AHA Executive Vice President Tom Nickels, in response to the committee’s request for input on how to improve the physician self-referral (Stark) law to implement new value-based payment models.

Those collaborative efforts require a “legal safe zone” so they can realize their full promise of providing better patient care, Nickels said.

“The Stark law is not suited to the new models and should not be the locus of oversight for these new arrangements,” the AHA letter stated. “The statute and its complex regulatory framework are designed to keep hospitals and physicians apart – the antithesis of the new models. Its core provisions micro-manage compensation arrangements on a strict liability basis that has proved unworkable.”

The Stark law prohibits a physician or immediate family member from making a referral for certain designated health services paid for by Medicare and Medicaid, including inpatient or outpatient services, to an entity in which the physician or family member has a financial relationship, unless an exception applies. The anti-kickback statute is intended to prevent inducements or rewards for referrals for services or items paid for by the Medicare and Medicaid programs. It is broadly drafted, and penalties apply to the person making a payment as well as the recipient.  

In its letter to Capitol Hill, the AHA recommended Congress create an exception for new coordinated care payment models under the anti-kickback statute and “arrangements protected under the exception be deemed compliant with the Stark law and relevant [civil monetary penalties].”

The reimbursement landscape is changing, the AHA noted, and as hospitals, physicians and other providers move to a “value-based paradigm from a volume-based approach, enforcement mechanisms and perspectives tethered to a bygone era must be visited, revised and, in some cases, abandoned to make way for innovation and improvement.”

On that point, the AHA observed that Congress last year eliminated a barrier created by the “gainsharing” civil monetary penalty when it passed the Medicare Access and CHIP Reauthorization Act, or MACRA. The legislation limits the scope of the gainsharing prohibition, which had prevented hospitals from offering physicians incentives to follow evidence-based care guidelines.

“In the MACRA, Congress made clear that a penalty was intended only if a hospital made payments to a physician to reduce or limit medically necessary care,” the AHA noted. “As a result, hospitals and physicians can share the rewards for improving quality of care without risk of sanction under that law.” 

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