CMS and OIG Release Changes to the Stark, Anti-Kickback and Patient Inducement Laws to Fuel Innovation, Ease Regulatory Burdens, and Reduce Drug Pricing

Bass, Berry & Sims PLC

Bass, Berry & Sims PLC

On November 20, in a coordinated effort, the Centers for Medicare & Medicaid Services (CMS) and the Office of Inspector General (OIG) released final rules to modernize regulations implementing the federal physician-self referral law (commonly referred to as the “Stark Law” or “Stark”), the federal Anti-Kickback Statute (AKS) and the beneficiary inducement provisions of the Civil Monetary Penalties Law (CMP Law). In addition, the OIG released a final rule addressing pharmaceutical rebates and discounts.

Links to the final rules can be found below:

While we are still digesting the thousands of pages released and look forward to bringing you a detailed analysis in the coming weeks, our initial review suggests these much anticipated final rules do not disappoint. Within these rules, CMS and the OIG create a framework for innovation in the context of value-based payment and coordinated care. Moreover, they promote improvements in technology infrastructure and, perhaps most significantly, take steps to reduce regulatory burdens. Further, the OIG aims to lower drug pricing and create more transparency in drug pricing.

In the Stark Law Final Rule and AKS and CMP Beneficiary Inducement Final Rule, the OIG “sought to strike the right balance between flexibility for beneficial innovation and better coordinated patient care with necessary safe guards to protect patients and federal healthcare programs.” Although these laws remain complex, CMS echoed this viewpoint in providing a number of flexibilities and clarifications “intended to balance genuine program integrity concerns against the considerable burden” of the Stark Law. With the AKS Pharmaceutical Rebates and Point-of-Sale Discounts Final Rule, the OIG purports to address “a perverse incentive” by excluding rebates on prescription drugs paid by manufacturers to PBMs and Part D plans from safe harbor protection under the AKS and attempts to lower out of pocket costs for certain patients with prescriptions for high cost drugs.

In the coming weeks, Bass, Berry & Sims will release an in-depth analysis that explores the details of the final rules to help you understand the many changes and their impact on the industry and your organization.

In addition to our summary, we will host a complimentary two-part webinar series on January 5 and 7 breaking down the most significant aspects of the new rules including the following:

  • Value-based framework: definitions, Stark exceptions and AKS safe harbors.
  • Outcomes-based payment flexibilities.
  • Technology and cybersecurity infrastructure improvements.
  • Clarification of longstanding Stark terminology and concepts.
  • Added flexibility to the Stark Law: new and like-new exceptions.
  • Expansion of the AKS personal services, warranties and transportation safe harbors.
  • Protections for incentive payments made by an ACO to assigned beneficiaries.
  • Exclusion of manufacturer rebates to PBMs and Part D plans from the discount safe harbor.
  • Addition of a new safe harbor for point of sale price reductions for pharmaceutical products.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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