On Friday, November 20, CMS released final rules implementing many Stark Law changes first proposed in October 2019 (the “Final Rules”). This release comes despite earlier suggestions that these Final Rules may be delayed until sometime in 2021. Developed as part of the Regulatory Sprint to Coordinated Care program, the Final Rules represent CMS’s recognition that the healthcare delivery and payment environment has changed from the “fee-for-service” model under which the Stark Law was developed, and that, in their current Form, the Stark Law’s regulations can impede the development of beneficial value-based relationships.
In its Friday press release, CMS identified four broad policies implemented under the Final Rules:
- Finalizing new, permanent exceptions for value-based arrangements that will permit physicians and other healthcare providers to design and enter into value-based arrangements.
- Finalizing additional guidance on key requirements of Stark Law exceptions to make it easier for physicians and other healthcare providers to make sure they comply with the law (e.g. clarification on the definition of “fair market value”).
- Finalizing other new exceptions to provide protection for non-abusive, beneficial arrangements between physicians and other healthcare providers (e.g. donations of cybersecurity technology).
- Reducing administrative burdens that drive up costs by taking money previously spent on administrative compliance and redirecting it to patient care.
In CMS’s view, the Final Rules include “a comprehensive package of reforms to modernize the regulations that interpret the Stark Law while continuing to protect the Medicare program and patients from bad actors” and will “support the necessary evolution of the American healthcare delivery and payment system.” It is clear that the changes implemented by the Final Rules offer physicians and other health care providers significant new business opportunities and may also call for a reevaluation of certain existing agreements in light of the new guidance. With one exception (relating to group practice profit shares), the Final Rules’ changes are to become effective January 19, 2021.
The UK Cabinet Office released a statement last Thursday 5th November 2020 that could provide some breathing space for the UK/EU pharmaceuticals sector during the Brexit transition, by indicating that a one year implementation period would apply to application of the protocol for certain matters.
For the pharmaceuticals sector, these include batch testing, importation and rules relating to falsified medicines (FMD).
The details of the exact scope of this relaxation are not clear from the statement and more guidance is to follow. This guidance will be important in establishing how compliance can be achieved from 1/1/21 given that importation, for example, has many regulatory aspects, some of which may continue to apply under the EU acquis from 1/1/21. The guidance could also shed light on what must change at the end of 2021 when the NIP is assumed to apply in full – subject to any further agreement.
The agreement of the Specialised Committee, set up under the NIP, clearly acknowledges difficulties in applying existing rules in Northern Ireland only once the Brexit implementation period comes to an end on 31/12/20, and how current systems and checks can be split apart, in practical terms, given well established regulatory infrastructure.
Last week, the Department of Health and Human Services (“HHS”) Office of the National Coordinator for Health Information Technology (“ONC”) announced an Interim Final Rule with Comment Period (“IFC”) delaying compliance dates and timeframes for information blocking and the health IT certification program. This delay will come as a welcome change for “Actors” (i.e., health care providers and developers of certified Health IT) struggling to implement changes amid the COVID pandemic.
ONC issued the Cures Act Final Rule (the “Final Rule”) in March 2020 to implement the 21st Century Cures Act’s information blocking provision and establish additional health information technology (“health IT”) certification requirements. A month later, in response to concerns raised regarding the COVID-19 pandemic by health IT developers, ONC delayed effective dates for three months longer than initially proposed. The IFC expands upon these revised timeframes to give providers additional flexibility to prioritize their pandemic responses. Continue Reading
The COVID-19 pandemic has revealed shortcomings in U.S. supply chains requiring immediate action to continue to provide personal protective equipment (“PPE”) during the ongoing crisis. Here, we’ve been published in Law360, discussing federal solutions for our national PPE shortages. Read the full article here.
On October 22, the Department of Health and Human Services (HHS) updated its guidance on how hospitals and other providers should report their use of the nearly $135 billion in Provider Relief Fund payments that have been distributed. The Provider Relief Fund, initially established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, is intended to cover provider expenses and lost revenues attributable to the coronavirus pandemic. HHS’s latest guidance is a huge victory for providers on how much of the funds may be used for lost revenues. Providers are to calculate and report their use of the funds for lost revenue “up to the amount of the difference between their 2019 and 2020 actual patient care revenue.” The funds may also be used to replace coronavirus-related revenue losses in the first half of 2021, by performing similar comparisons to 2019 revenue.
HHS’s latest instruction overrides its guidance from September limiting eligible “lost revenues” to lost profits from patient revenue. But that September guidance surprised providers because it appeared to contradict the agency’s original instruction, from a June 2019 FAQ, that the funds may be used to replace any revenue lost due to the coronavirus and used to cover any costs the lost revenue would otherwise have covered (except salary amounts over $197,300). HHS explained that it has reversed course because the September guidance “generated significant … opposition from many stakeholders and Members of Congress” and the consensus is that providers should be allowed to apply Provider Relief Fund “payments against all lost revenues without limitation.”
HHS’s guidance provides detailed instructions for reporting additional expenses and revenue losses. The portal for reporting the use of Provider Relief Funds is scheduled to open on January 15, 2021, and the first reports are due on February 15, 2021.
On October 14, the Centers for Medicare and Medicaid Services (CMS) announced that it has expanded its list of telehealth services approved for Medicare beneficiaries during the COVID-19 Public Health Emergency (PHE). The eleven telehealth services CMS just added are for cardiac and pulmonary rehabilitation. CMS approved them using an expedited process it unveiled in a May Interim Final Rule. These eleven new services, along with many others designated as temporary, will remain in effect for the duration of the PHE.
CMS simultaneously announced preliminary data showing an explosive 2600% growth in the use of telehealth by Medicaid and CHIP beneficiaries between March and June 2020, as compared to that time last year. “To further drive telehealth” among Medicaid populations, CMS said it has released a new supplement to its toolkit to guide states in expanding the use of telehealth.
CMS said it took these actions in response to President Trump’s August 3, 2020 Executive Order directing the agency, among other things, to review the “additional telehealth services offered to Medicare beneficiaries” and to “propose a regulation to extend these measures, as appropriate beyond the duration of the PHE ….”
CMS’s announcement is more good news for Medicare and Medicaid providers and beneficiaries alike regarding the agency’s commitment to the robust use of telehealth. But Congress holds the key to allowing the telehealth expansion to continue beyond the PHE—it must lift statutory restrictions that ordinarily allow telehealth only in rural areas and not in a patient’s home. With bipartisan support for telehealth expansion, lawmakers may increase their focus on the issue in 2021 when the new Congress convenes and the PHE hopefully is coming to an end.
As we reported last October, CMS and the OIG issued proposed rules aimed at updating the Stark Law, Anti-Kickback Statute, and Civil Monetary Penalties Law as part of HHS’ Regulatory Sprint to Coordinated Care. In part, the proposed rules seek to address the current value-based and coordinated healthcare environment. While publication of final rules concerning the Stark Law changes was originally expected in August 2020, late last month CMS announced an extension of the final rule publication date to August 31, 2021. The announcement stated that the agency is “still working through the complexity of the issues raised by the comments” as the reason for the extension.
Thus far, the OIG has not released a similar statement concerning publication of its changes to the Anti-Kickback Statute and Civil Monetary Penalties Law. However, given that CMS and OIG issued the proposed rules together, it seems reasonable to conclude that the OIG’s issuance of final rules for its changes will be similarly delayed.