Your referrals, value-based arrangements, and physician compensations can land you with huge penalties unless you meet all of the 2021 Stark Law requirements that went into effect January 19th, 2021

Make just one error, and you’ll be fined $25,000-$50,000 per violation – you can even be excluded from Medicare and Medicaid.

CMS and OIG have made massive changes to the Physician Self-Referral Law, also known as the Stark Law, to prevent you from being rewarded for steering patients to providers, services, or facilities.

The regulation puts rules in place on a huge amount of your operating areas including physician compensation, office space leasing, marketing, and business arrangements such as with your IT and security vendors.

New 2021 Stark Law Exceptions for Value-Based Arrangements

Trouble is, as healthcare moves steadily towards value-based care and payment models, the Stark Law — in its current iteration — is holding progress back, say many providers. Why? The stiff penalties that come with Stark and Anti-Kickback Statues (AKS) violations make you think twice about entering value-based arrangements — arrangements that may reduce your costs, increase patient satisfaction, improve care results, and more.

Now, the OIG has answered your call to action and finalized 2021 Stark exceptions — and AKS safe harbors — for value-based arrangements. In January, you’ll have new opportunities to participate in value-based partnerships if you know how …

New, Broad Definitions Make Stark Law Exceptions More Accessible

CMS used broad and general language, which gives you plenty of options for your activities to qualify for one of the Stark exceptions. Here are some terms to get you acquainted with the requirements set forth in the 600+ page final rule.

• A “value-based activity” is one that is reasonably designed to achieve one or more value-based purposes. The activity could be taking an action, not taking an action, or provisioning a certain item or service. Examples are providing:
  • transportation services to a patient
  • healthcare technology to a physician to track a patient’s condition remotely

• A “value-based purpose” for a target patient population includes:
  • Care coordination or management
  • Improving quality of care
  • Reducing costs (without reducing quality of care)

Beware that maintaining quality of care, or cost reducing alone doesn’t count as a value-based purpose.

• A “target patient population” is an identified group of patients based on legitimate and verifiable criteria that is set out in writing at the beginning of any value-based endeavor. Examples of target patient populations include:
  • Patients undergoing hip replacement surgery
  • Patients with a common chronic disease
  • Patients in a certain county or zip code

Five Stark Conditions to Protect Outcomes-Based Payment

The new outcomes-based payment guidelines under the Stark exceptions are really broad and more flexible than the new safe harbors. To avoid violations, you must always meet five requirements:

1. Payment must be for value-based activities for patients in a target population.
2. Your providers are not encouraged by payments to limit medically necessary services to any patient.
3. Payment must not depend on referrals of patients outside of the target population, or services not covered under the value-based arrangement.
4. If payment is conditioned on referrals, the arrangement must be in writing, signed by all parties, and not prohibit referrals to alternate providers.
5. You must maintain records of your payment methodology for at least six years, and provide those records to HHS.

Meet These Requirements for Compliant, Referral-Based Compensation

Under the overhauled Stark rules, you can provide value-based remuneration between providers provided it is monetary (i.e. shared savings) or in-kind (i.e. software, care coordination services). Physician compensation may take into account the physician’s referral to a specific provider (including facilities, practitioners, suppliers, etc.) — and still be considered compliant — as long as two requirements are met:

1. The referral requirement is in writing and must be signed by both parties.
2. The referral requirement will not apply if:

• • The patient requests a different provider
  • The patient’s insurance determines the provider
  • The referral is not in the patient’s best interests (as judged by the physician)

Of course, these are just brief descriptions of what’s contained in the vast final rule. Overall, the new Stark exceptions will make it easier for you to collaborate and partner in value-based arrangements — but there’s still a catch. The exceptions are purposely vague, so a lot is left up to interpretation. That means, if you’re not careful that your referral and physician compensation structures meet every exception or safe harbor requirement, you could end up with significant violations and penalties that are just as severe as ever.

There is an easier way …

That’s where healthcare compliance attorney and Stark law expert, Gina Campanella, Esq., FACHE, can help. During her 60-minute online training session, “Avoid Penalties Due to Massive 2021 Stark Changes (Jan. 19 Deadline),” she’ll break down the new rules in plain English and walk you through each of the new requirements you must meet. She’ll give you proven strategies to fix your risk areas and prevent your practice from doling out thousands of dollars in fines for your referral policies, care coordination, business agreements, compensation arrangements, and other financial management.