New Stark Law and Anti-Kickback Statute Physician Wellness Program Exception

Maynard Nexsen

Maynard Nexsen

The Physician Self-Referral Law (the “Stark Law”) and Anti-Kickback Statute (“AKS”) are two of the most prominent healthcare fraud and abuse laws in the United States. The Stark Law and AKS have been in place for many years and have undergone various amendments to adapt to the changing healthcare landscape. The Consolidated Appropriations Act, 2023, signed into law on December 29, 2022, introduced new exceptions to these laws.

Overview of the Stark Law and AKS

The Stark Law prohibits physicians from making referrals for certain designated health services payable by Medicare or Medicaid to entities in which the physicians or their family members have a financial interest; and it prohibits the submission of Medicare or Medicaid claims or bills to any individual, third party payor, or other entity for designated health services furnished pursuant to a prohibited referral. Stark Law violations can result in significant financial penalties and exclusion from federal healthcare programs.

The AKS is a criminal statute that prohibits the knowing and willful offering, paying, soliciting, or receiving of remuneration to induce or reward referrals of items or services reimbursable by a federal health care program, including, but not limited to, Medicare, Medicaid, and TRICARE. “Remuneration” includes the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in kind. Similar to the Stark Law, AKS violations can result in significant financial penalties, exclusion from federal healthcare programs, and even imprisonment. Violation of the AKS or Stark Law could also lead to potential federal False Claims Act liabilities. See 31 U.S.C. §§ 3729–3733; see also 18 U.S.C. § 287 (criminal false claims statute).

Both the Stark Law and AKS have certain statutory exceptions that permit financial relationships that would otherwise be prohibited under those laws. The exceptions are designed to promote beneficial arrangements while preventing fraud and abuse.

New Exceptions under the Consolidated Appropriations Act, 2023

Section 4126 of the Consolidated Appropriations Act, 2023 (Public Law No: 117-328) introduced new Stark Law and AKS exceptions for physician wellness programs. These exceptions allow healthcare entities to provide certain mental and behavioral health programs to physicians and other clinicians.

The Stark Law exception, which will be located at 42 U.S.C. § 1395nn(e)(9), permits certain healthcare entities to offer bona fide mental health or behavioral health improvement or maintenance programs to physicians for the primary purpose of preventing suicide, improving mental health and resiliency, or providing training to promote the mental health and resiliency of such physicians. To qualify for the exception, the program must be offered by a certain kind of entity with a formal medical staff—a hospital; ambulatory surgical center; community health center; rural emergency hospital; rural health clinic; skilled nursing facility; or similar entity, as determined by the United States Secretary of Health and Human Services—to all physicians who practice in the geographic area served by the entity, including physicians who hold bona fide appointments to the medical staff of such entity or otherwise have clinical privileges at such entity. The program must be offered on the same terms and conditions to all such physicians and without regard to the volume or value of referrals or other business generated by a physician for the entity and must consist of counseling, mental health services, a suicide prevention program, or a substance use disorder prevention and treatment program.

The entity must also have a written policy that includes a description of the program’s content and duration and evidence-based support for the design of the program, estimated cost of the program, personnel conducting the program, and a method for evaluating the program’s use and success. The program must be evidence-based and conducted by a qualified health professional, and it must meet any other requirements imposed by the United States Secretary of Health and Human Services to protect against program or patient abuse. The number or value of referrals made by a physician to the entity, or the amount or value of other business generated by the physician for the entity, must not affect either the provision or the value of the program.

The new AKS exception, which will be located at 42 U.S.C. § 1320a-7b(b)(3)(L), essentially mirrors the Stark Law exception, but also applies to other clinicians (in addition to applying to physicians) and does not statutorily apply to rural health clinics. Accordingly, it permits certain healthcare entities to provide bona fide mental health or behavioral health improvement or maintenance programs to physicians and other clinicians.

In summary, the Consolidated Appropriations Act, 2023 has introduced new exceptions that allow certain health care entities to offer mental health and behavioral health support programs without fear of violating the Stark Law or AKS. The wellness programs permitted by these exceptions should help to improve the mental health and well-being of healthcare providers, which should ultimately benefit patient outcomes and reduce healthcare costs.

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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