HHS posted a report to Congress on its website in August 2016 that responds to the requirements in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) to offer legislative and regulatory suggestions regarding the constraints of fraud and abuse laws in hindering innovative, value-based care models. In this report, HHS acknowledges that the fraud and abuse laws can be “an impediment to robust, innovative programs that align providers by using financial incentives to achieve quality standards, generate cost savings, and reduce waste.”
Section 512(b) of MACRA required the Secretary of HHS, in consultation with HHS OIG, to submit to Congress, “a report with options for amending existing fraud and abuse laws in, and regulations related to, titles XI and XVIII of the Social Security Act, through exceptions, safe harbors or other narrowly tailored provisions, to permit gainsharing arrangements that otherwise would be subject to the civil money penalties described in paragraphs (1) and (2) of section 1128A(b) of such Act, or similar arrangements between physicians and hospitals, and that improve care while reducing waste and increasing efficiency.”
In its report, authored by CMS in consultation with OIG, the department was tasked with responding to the following issues:
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Consider whether such provisions should apply to ownership interests, compensation arrangements, or other relationships;
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Describe how the recommendations address accountability, transparency, and quality, including how best to limit inducements to stint on care, discharge patients prematurely, or otherwise reduce or limit medically necessary care; and
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Consider whether a portion of any savings generated by such arrangements (as compared to a historical benchmark or other metric specified by the Secretary to determine the impact of delivery and payment system changes under title XVIII on expenditures made under such title) should accrue to the Medicare program.
Even though HHS abstained from offering specific legislative or regulatory proposals for amending the existing fraud and abuse laws as required by MACRA, it acknowledged the limits of the statutory exceptions currently available for providers considering value-based arrangements. HHS specifically highlighted the obstacles caused by the physician self-referral law, which prohibits compensation to physicians to account for the volume or value of a physician’s referrals or other business generated between the parties. The report noted that HHS provided waivers for HHS-administered programs such as the Medicare Shared Savings program and other demonstrations developed by the Center for Medicare and Medicaid Innovation only where authorized by specific statutory provisions. The agency acknowledged that provider-sponsored gainsharing and other innovative arrangements that operate outside the Medicare program could also benefit Medicare by providing overall cost savings to the program while simultaneously improving care to patients, reducing waste, and increasing efficiency.
The American Hospital Association (AHA) expressed support for Congress’s efforts to reexamine the fraud and abuse statutory and regulatory regime, and separately released a report sharing its view of the impediments to collaboration caused by existing fraud and abuse laws. In its report, AHA offered specific legislative recommendations, suggesting that Congress authorize a comprehensive safe harbor for innovative arrangements that will allow hospitals to fully invest in value-based models, allow payments to physicians to reflect achieving patient-centered goals, and allow hospitals or other sponsors to provide needed assistance to patients where appropriate to foster improved access to care. The King & Spalding Stark Coalition has also identified other problems arising from the physician self-referral law and other potential areas for improvement.
The HHS Report to Congress can be found here; and the AHA response is available here.
