The shift to value-based care involves financial incentives for anesthesia practices that could conflict with existing fraud and abuse laws, such as Stark law, according to a Jan. 24 report from law firm Whiteford in JDSupra.
Here are 10 notes for anesthesia providers know about the potential legal dangers of value-based care arrangements:
1. Stark law prohibits Medicare referrals to entities with financial ties to the referring physician or an immediate family member, with severe liability for violations. The anti-kickback statute prohibits remuneration to induce referrals, also carrying severe penalties, including fines and imprisonment.
2. Here are five key definitions to know in regards to Stark law and value-based definitions:
- Value-based purpose: Improving care coordination, quality and cost efficiency without sacrificing quality, while shifting to payment models based on value.
- Value-based activity: Any action (or inaction) aimed at achieving a value-based purpose, including providing services or managing care.
- Value-based arrangement: An agreement between an enterprise and its participants to carry out at least one value-based activity for a defined patient group.
- Value-based enterprise: A collaboration of at least two participants working toward a value-based purpose, with oversight and governance in place.
- Target patient population: A specific patient group chosen by a VBE or its participants based on clear, preestablished criteria.
3. CMS provides more flexibility under Stark law, allowing informal affiliations and broader arrangements. The Office of Inspector General is more restrictive under the AKS, focusing on intent and risk-sharing, which could impact anesthesia providers entering value-based arrangements.
4. Certain exceptions (Stark) and safe harbors (AKS) allow VBC arrangements without violating regulations. Traditional restrictions such as fair market value, preset remuneration and prohibitions on directed referrals are eased. However, both CMS and OIG stipulate that remuneration in VBC cannot be tied to referrals outside the defined patient population.
5. Here's a breakdown of the specific categories that the exceptions and safe harbors fall under and how they can be used
Limited or no-risk share arrangements
- AKS care coordination: Covers in-kind remuneration for patient care coordination with a 15% cost-contribution requirement.
- Stark law value-based arrangements: Protects physician compensation arrangements regardless of risk level.
Substantial-risk share arrangements
- AKS substantial downside risk: Protects monetary and in-kind remuneration for enterprises assuming defined risk.
- Stark meaningful downside risk: Shields remuneration where significant financial risk is documented.
Full financial risk share arrangements
- AKS full financial fisk: Protects full-risk arrangements covering a defined patient population.
- Stark full financial risk: Applies only when the VBE assumes full downside risk, though individual physicians are not required to assume such risk.
6. Another critical factor in setting up a VBC arrangement is the gainsharing civil monetary penalties law, which prohibits hospitals from paying physicians to reduce necessary Medicare/Medicaid services. The Medicare Access and CHIP Reauthorization Act of 2015 revised this law, allowing certain VBC-aligned gainsharing arrangements, if they do not compromise care.
7. Here are four compliance considerations under the gainsharing civil monetary penalties law:
- Regular monitoring: Prevents cherry-picking or reducing necessary care.
- Credible medical evidence: Ensures arrangements improve care.
- Transparency: Clear compensation structures and patient notifications.
- Safeguards: Monitoring to prevent incentives from reducing necessary services.
8. Establishing VBC arrangements requires careful drafting of contracts to ensure compliance with legal requirements. Anesthesia providers should consider the following:
- Clearly define coverage requirements (locations, hours and call responsibilities).
- Address flexibility for changes in coverage and mutual decision-making.
- Ensure anesthesia providers participate in broader hospital activities (e.g., OR management and quality improvement).
- Establish clear benchmarking metrics (e.g., case cancellations, recovery times, patient satisfaction and hospital transfers).
9. According to the report, here are nine best practices for compliance:
- Align with safe harbors: Engage legal counsel to confirm compliance.
- Monitoring committees: Implement oversight to track performance.
- Inform patients: Provide written notice of VBC arrangements.
- Clear metrics: Use evidence-based quality and efficiency measures.
- Maintain documentation: Keep detailed records of services, costs and remuneration.
- Prevent cherry-picking: Implement safeguards against selecting healthier patients.
- Ensure commercial reasonableness: Agreements should not induce referrals or limit necessary care.
- Corrective actions: Audit regularly and adjust as needed.
- Data analytics: Use reliable data to track compliance and outcomes.
10. Overall, VBC in anesthesia presents opportunities for cost savings and quality improvement but requires strict compliance with Stark law, AKS and gainsharing CMPL. Careful planning, adherence to regulatory safeguards, and proactive legal oversight are critical to mitigating risk while optimizing patient outcomes and financial performance, ac