Anti-Kickback and Stark Laws

Amnah Anwar is the program director for the Upper Midwest Telehealth Resource Center and Senior Director at the Indiana Rural Health Association. The COVID-19 pandemic sparked a significant surge in telehealth adoption, transforming healthcare delivery. With relaxed regulations and increased reimbursement, telehealth became a lifeline for patients and providers during the Public Health Emergency (PHE). Although many waivers and flexibilities introduced during the PHE have been extended, few ended on May 11, 2023. On February 24, 2023, CMS confirmed that healthcare providers will no longer be able to avail themselves of the Stark Law blanket waivers (Stark Blanket Waivers) following termination of the PHE and thereafter must comply with all Stark Law requirements. HHS OIG’s enforcement discretion under the Federal anti-kickback statute (AKS) concerning specific remuneration covered by the Stark Blanket Waivers also ended on May 11, 2023.

This blog post will explore how these regulations may impact telehealth practices in a post-PHE landscape.

Anti-Kickback and Stark Laws: An Overview

The Anti-Kickback Statute (AKS) and the Stark Law are federal laws designed to prevent fraud and abuse in healthcare programs. While they have been in place for years, the increased use of telehealth services has brought their implications into sharper focus.

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving any remuneration to induce or reward referrals of services reimbursable under federal healthcare programs.

The Stark Law, on the other hand, prohibits physicians from referring Medicare or Medicaid patients to entities in which they have a financial relationship.

Below we will explore the key developments in Anti kickback statute and Stark Law and their implications for telehealth practice.

What changes can telehealth practitioners expect with the end of the Public Health Emergency (PHE) in relation to Anti-Kickback and Stark Law statutes?

Answer: The end of the PHE can bring specific changes to telehealth practitioners’ compliance obligations under Anti-Kickback and Stark Law statutes. While specific implications may vary, it is essential to understand the potential impact. Telehealth practitioners should review the guidance provided by the Centers for Medicare and Medicaid Services (CMS) to stay updated on any changes. Here is the link to CMS’s guidance on telehealth during the PHE: CMS Telehealth During COVID-19 PHE.

 How has the December 2, 2020, Final Rule modified the Stark Law, and what does it mean for telehealth practitioners?

Answer: The Final Rule brought significant modifications to the Stark Law, impacting telehealth practitioners as well. If the providers relied on any of the blanket waivers during the PHE, they need to make sure that they familiarize themselves with these new provisions. The revisions addressed critical principles, including fair market value, commercial reasonableness, compensation analysis, indirect compensation arrangements, and exceptions commonly used to protect such arrangements. Detailed information about the changes in the Final Rule can be found through this link: Stark Law Modernization: Key Provisions.

Question: How does “group practice” redefinition impact telehealth practice?

Answer: The redefinition of “group practice” introduced changes that may affect telehealth practices, particularly in profit-sharing among physicians for ancillary revenue services. To ensure compliance, telehealth practitioners should familiarize themselves with the updated definition. Revision of Group Practice Provisions.

Question: What are the revised requirements under the Self-Referral Disclosure Protocol and how do they affect telehealth practice?

Answer: The revisions to the Self-Referral Disclosure Protocol introduce updated forms and document submissions for disclosures. Telehealth practitioners should know about the changes and understand the new “Group Practice Information Form” related to in-office ancillary services or physician services exceptions. These revisions’ details and impact are in the Federal Register document: Revisions to Self-Referral Disclosure Protocol.

Question: How should telehealth practitioners prepare for the post-PHE regulatory requirements pertaining to Stark Law and Anti KickBack Statute? 

Answer : Telehealth practices should take the following steps to ensure compliance with the Stark Law and Anti-Kickback Statute post-PHE:

Inventory financial arrangements: Identify all ongoing and historical financial arrangements with physicians relying on the Stark Blanket Waivers. These arrangements may include compensation agreements, lease arrangements, and other financial relationships.

Evaluate compliance: Each financial arrangement should be individually assessed to determine if it will remain compliant with the Stark Law and Anti-Kickback Statute after the regulatory flexibilities end. This evaluation involves reviewing the specific requirements of the applicable Stark Law exceptions and ensuring that all elements are met.

Determine COVID-19 Purposes: The Stark Blanket Waivers were implemented based on CMS’s “COVID-19 Purposes”. It is necessary to verify that the arrangements tied to the Stark Blanket Waivers were solely related to one or more COVID-19 Purposes. Alternative compliance measures must be considered if an arrangement does not meet the COVID-19 Purposes or other exceptions under the Stark Law.

Review documentation: Ensure that appropriate records are in place for financial arrangements relying on the relaxed regulatory requirements during the PHE. These records should describe the specific COVID-19 Purpose(s) underlying the need for the arrangement. If there is a lack of contemporaneous records, developing them now and maintaining them in a centralized location is advised.

Remediate or terminate non-compliant arrangements: After inventorying and evaluating all financial arrangements relying on the Stark Blanket Waivers, take the necessary steps to remediate or terminate any arrangements determined to be non-compliant. The appropriate form of remediation will vary depending on the specific arrangement. Some arrangements may be amended to satisfy a Stark Law exception, while others may need to be terminated. In some cases, it may be necessary to renegotiate and enter into a new compliant arrangement.

Modification of arrangements: CMS has clarified that compensation terms of arrangements may be modified as necessary following the termination of the PHE. However, the modifications must still satisfy all requirements of an applicable exception. The amended compensation terms should be determined before implementing the changes and must not consider the volume or value of referrals or other business generated by the referring physician.

It is essential to remember that any disbursement of loan proceeds after May 11, 2023, or additional remuneration related to office space, equipment, items, or services furnished by or to a designated health services (DHS) entity or physician, must fully satisfy an applicable exception following the termination of the Stark Blanket Waivers.

What are the consequences of noncompliance with the Stark Law and Anti-Kickback Statute?

Answer: Noncompliance with the Stark Law and Anti-Kickback Statute can seriously affect your practice. Both statutes carry significant civil penalties, and potential exclusion from participation in federal healthcare programs such as Medicare and Medicaid and can form the basis for Department of Justice or whistleblower claims under the False Claims Act. https://www.cms.gov/medicare/physician-self-referral/fraud-and-abuse-waivers

https://oig.hhs.gov/compliance/physician-education/fraud-abuse-laws/

Note: Telehealth practices need to consult with legal professionals or regulatory experts to ensure accurate interpretation and application of laws and regulations in their specific circumstances. The provided answers serve as a starting point for understanding the general implications of the end of the PHE and modifications to Anti-Kickback and Stark Law statutes.