What Stark law, anti-kickback changes mean for value-based care at ASCs

HHS issued two rules on value-based care arrangements recently that will affect orthopedic surgeons and ASCs.

CMS made adjustments to the Stark law, and HHS updated the federal Anti-Kickback Statute and the civil monetary penalties law to ensure healthcare providers could develop value-based care arrangements without fear of fraud and abuse charges. The changes to the Anti-Kickback Statute make it easier to enter into value-based care arrangements, especially if providers take full risk. 

"ASCs have always been important in value-based arrangements as the lower cost site of care," said Paul Jawin, JD, executive vice president at Phoenix-based HOPCo. "With Stark and anti-kickback changes, there will be an acceleration of the shift from inpatient procedures and the hospital outpatient department to the ASC. This makes it easier to create value-based programs, and physicians will have more flexibility in deciding where the appropriate site of care is for their patients."

The new exceptions created to the Stark law and safe harbors for Anti-kickback Statute to protect value-based arrangements define them as:

1. Coordinating and managing the care of a target patient population

2. Improving the quality of care for the target patient population

3. Reducing costs to, or growing expenditures of, payers without reducing the quality of care

4. Transitioning from healthcare delivery and payment mechanisms based on volume of items and services provided to mechanisms based on the quality of care and cost control

"The exceptions create flexibility in how physicians are compensated. The arrangement doesn't need to be as narrow and rule-bound as it has been," said Mr. Jawin. "There will be more opportunities for physicians to receive compensation in value-based care."

The exceptions don't require setting compensation in advance, consistency with fair market value or determined in a way that doesn't take the volume or value of physician referrals into account. But there is a commercial reasonableness standard for pay, and the exceptions apply to both Medicare and nonMedicare beneficiaries.

In the past, parties entering into value-based care arrangements hired fair market value appraisers to dictate compensation.

"The rule changes make it faster and less expensive to put these transactions together and allow more flexibility," said Mr. Jawin. "I think you'll see arrangements become more effective because physicians are paid more and everyone is pulling for the same objectives: reducing costs and increasing quality."

The new exceptions and safe harbors are for value-based arrangements when participants take on full risk, substantial risk with at least 10 percent downside, or arrangements where providers do not take on financial risk. There are incentive payments for participants who take on at least 10 percent risk.

These adjustments could change the way physicians practice because they can prioritize aspects of care that affect outcomes in a way they couldn't before.

"If a patient needs transportation for an appointment, or a tablet for virtual care, that can be provided," said Mr. Jawin. "There is a lot of creativity that is allowed in healthcare. We are seeing change with the pandemic and accelerated telehealth."

Orthopedics has been at the forefront of value-based care, and Mr. Jawin said he expects that to continue. "We will see orthopedics delving even more into value-based care and expect surgeons and practices to take more risk because they have been exposed to some risk already," he said.

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