Stark AKS and the Regulatory Sprint to Coordinated Care 

January, 2021 - Daniel Patten, John Wesley Williamson

The most recent changes to the Stark Physician Self-Referral Law (Stark) and the Anti-Kickback Statute (AKS), described previously here, create a new lexicon and framework to guide healthcare providers from payment for volume-based services to payment for value-based healthcare. These value-based rules go into effect on January 19, 2021.

The value-based changes center on a new Stark exception and AKS safe harbor for an acceptable “value-based arrangement” based on the arrangement’s financial risk profile. CMS and OIG both define a “value-based arrangement” as:

an arrangement for the provision at least one value-based activity for a target patient population to which the only parties are: (A) the value-based enterprise and one or more of its VBE participants; or (B) VBE participants in the same value-based enterprise.

These final rules focus heavily on process and purpose, not outcomes. For example, a value-based activity does not haveto achieve value-based care or the stated value-based purpose to be acceptable. Instead, the value-based activity must be “reasonably designed” to achieve value-based care, and the parties must have a good faith belief that the value-based activities will achieve the intended value-based purpose.

Each of the emphasized words in the definition above are defined in the new rules. In this article, we will unpack two of these key value-based definitions—“value-based purpose” and “value-based enterprise.”

Value-Based Purpose (VBP)

A “value-based purpose” is defined under the new regulations as:

  • Coodinating and managing the care of a target patient population;
  • Improving the quality of care for a target patient population;
  • Appropriately reducing the costs to, or growth in expenditures of, payors without reducing the quality of care for a target patient population; or
  • Transritioning from healthcare delivery and payment mechanisms based on the volume of items and services provided to mechanisms based on the quality of care and control of costs of care for a target patient population.

The agencies intended the definition of VBP to be flexible as the agencies declined to specify criteria to measure the achievement of the VBP. The final rule did provide some examples of VBPs, such as coordinating and managing the care of patients who undergo lower extremity joint replacement procedures (a target patient population) or reducing the costs while improving or maintaining the quality of care for patients who undergo lower extremity joint replacement procedures.

CMS declined to implement and finalize some concepts requested by the healthcare community. CMS denied including the reduction in costs to, or growth in expenditures of, “healthcare providers and suppliers” as VBPs. CMS believed the purposes already stated are sufficiently inclusive to allow for innovative value-based arrangements as long as improving quality of care is the focus. The agency also declined to define “coordinating and managing care.” Commenters to the proposed ruled noted the term is self-explanatory and defining the terms could inadvertently limit or interfere with innovation.

 

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