Are We There Yet? OIG and CMS Issue Long-Awaited Final Rules Aimed at Promoting Innovative Value-Based Care Models and Arrangements

Journal of Health Care Compliance January–February, 2021

Anjali N.C. Downs, Jennifer E. Michael, Victoria Vaskov Sheridan, and Lesley R. Yeung, Members of the Firm in the Health Care & Life Sciences practice, co-authored an article in the Journal of Health Care Compliance, titled “Are We There Yet? OIG and CMS Issue Long-Awaited Final Rules Aimed at Promoting Innovative Value-Based Care Models and Arrangements.”

Following is an excerpt (see below to download the full version in PDF format):

Traditionally, the U.S. health care system has relied on a fee-for-service (FFS) payment methodology, pursuant to which reimbursement is made for each item or service provided, regardless of cost or the result­ing patient outcomes. Due to the unsustainable ongoing increase in health care costs, however, the paradigm is shifting to a value-driven system whereby payors pay for the value of the health care items and services pro­viders deliver—as measured by improving health out­comes and quality, reducing costs, or both—rather than the volume of services they provide. Value-based care models and arrangements include a wide variety of per­formance-based payment strategies that link financial incentives to health care providers’ performance on a set of defined measures that are designed to achieve bet­ter value.

Both public and private payors are using various value-based care strategies in an effort to drive improve­ments in quality and to slow the growth in health care spending. Value-based care strategies range from pay­ing incentives to providers for achieving quality and/ or reducing costs to requiring providers to assume a degree of financial risk in providing services to a partic­ular patient population. However, as stakeholders seek to shift from traditional FFS reimbursement to value-based care models and arrangements, they face sig­nificant regulatory and operational barriers, including obstacles posed by the traditional fraud and abuse laws that generally prohibit the exchange of remuneration relating to items or services covered by federal health care programs.

Recognizing the need to address the impediments the fraud and abuse laws pose to the adoption of coordinated care and value-based care arrangements, on December 2, 2020, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) and the Centers for Medicare & Medicaid Services (CMS) published long-awaited companion final rules to revise the anti-kickback statute (AKS) safe har­bors and the civil monetary penalties (CMP) rules, and the federal physician self-referral law (commonly referred to as the “Stark law”) exceptions, respectively.1 While the final rules address a variety of arrangements and modify various exist­ing regulations, they focus heavily on care coordination and value-based care.

This article focuses on the new value-based safe harbors and exceptions under the AKS and Stark law, and compares and contrasts the agencies’ rules. The new value-based safe harbors and exceptions offer entities new ways to provide remu­neration that is tied to measures taken to achieve desired outcomes, rather than the performance of a service. Questions remain, however, regarding whether these safe harbors and exceptions ultimately will promote innovative value-based care arrangements and how OIG and CMS will interpret and enforce these arrangements going forward.