HHS Deputy Secretary Eric Hargan speaks to AHLA CEO David Cade about the newly unveiled Stark and Anti-Kickback Statute proposed regulations. Hargan discusses how the proposed rules are a central feature of the agency’s broader effort to advance value-based care and reduce regulatory burdens that impede care coordination. The podcast describes the key revisions to the fraud and abuse regulations including proposed new safe harbors and exceptions, updates to existing exemptions, and definitions of commercial reasonableness, volume and value of referrals, and fair market value. Hargan also talks about next steps and the agency’s priorities for regulatory reform. Sponsored by GlassRatner, a B. Riley Financial company.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
HHS Deputy Secretary Eric Hargan speaks to AHLA CEO David Cade about the newly unveiled Stark and Anti-Kickback Statute proposed regulations. Hargan discusses how the proposed rules are a central feature of the agency’s broader effort to advance value-based care and reduce regulatory burdens that impede care coordination. The podcast describes the key revisions to the fraud and abuse regulations including proposed new safe harbors and exceptions, updates to existing exemptions, and definitions of commercial reasonableness, volume and value of referrals, and fair market value. Hargan also talks about next steps and the agency’s priorities for regulatory reform. Sponsored by GlassRatner, a B. Riley Financial company.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
Support for H L a and the following message comes from Glass Rattner, a national specialty advisory services firm whose healthcare team has extensive experience working with providers, health plans, and attorneys. For more information, visit glass rattner.com.
Speaker 2:Hello everyone, this is David Cade, c e o of the American Health Lawyers Association. Today I'm with Eric Hargan, US Department of Health and Human Services, deputy Secretary. Welcome, Eric.
Speaker 3:Thanks, David. Good to be here.
Speaker 2:So, c m s and OIG G released the long awaited Stark and Eddie Kickback statute proposed rules. It's been a busy summer for you. I think indeed, it's probably been a very busy year for you. When we took a look at the regulations, a a theme themes actually sort of popped up, innovation, flexibility, clarity, quality, transparency, and predictability. Now, there may be some other words that link to that. If I'm right, if you could take a moment and explain to the listeners what was the driving force behind these changes and what is the department trying to do?
Speaker 3:Sure. So I think those are exactly hit on the themes that we're talking about conceptually here, this is part of the overall drive to coordinated care, which is one of the legs of value-based care. Uh, as you know, secretary Azar has outlined some high level, uh, drives that we're engaged in here at hhs, and one of those is value-based care, uh, which is something that goes back at least two administrations, uh, back to, uh, the Bush administration and the Obama administration carried forward on that. Now we are engaged in continued drive on value-based care. We see coordinated care as central to that. Uh, the ability to be able to have, uh, for the patient to have a, uh, sort of end to end care within the system, we think is, that's very important for us to be able to drive value in the system. Within that, we know that we have at least some regulations that may inhibit the ability for providers to provide this seamless continuum of care. Central to that is, are the, the Stark law regulations and the anti kickback statute regulations, uh, which in some cases have not been revised for a very long time. And we looked at this and took a fresh look at how these regulations had arisen and what the goals were to be served. Obviously, this is not a statutory revision endeavor, it's a regulatory revision. We operate within the bounds of the law that we've been given to execute, and there's no question that we're trying to serve those goals, uh, of, uh, of the laws. But we believed that there are places where the regulations could be useful, updated, uh, to enable, uh, a better drive towards value-based care on the part of the providers, uh, and the patients. So you're right that we we're, we, we looked at this as the changes essentially falling into three categories. First, we are creating a new set of exceptions in safe harbors that deal with value-based arrangements, so that we would enable people to even outside the context of models and ACOs, to be able to affiliate with one another in a value-based enterprise to put down in writing a, the participants in the value-based enterprise, a target patient population, and some outcomes that they were driving towards. This essentially enables this to be done without everyone going under one of the existing safe harbors. Uh, some of which might involve, uh, you know, people either employing doctors or purchasing other entities. So in other words, we believe that you should be able to do this outside of a sort of consolidated entity. That's one of the, the goals here. We believe that you could put together value-based arrangements even with independent actors inside the healthcare sector. So we've enabled, in this proposal, we've enabled that. Second, we're updating some existing exceptions in safe harbors to move towards outcomes-based care and improving security in information sharing. So you'll see that we put in outcomes-based, uh, changes to the existing personal services and management services, safe Harbor. Uh, and we've done some other things that dealing with electronic health records and cybersecurity software, removing the sunset on the electronic health records donation, adding a new standalone cybersecurity software exception. Uh, and last we're clarifying some of the basic terms and definitions in the Stark Law regulations. So the healthcare providers can spend long term less money and time on compliance and had more certainty about innovating in this space. So terms like, uh, commercially reasonable volume and value of referrals and, um, fair market value, which are really fundamental, um, definitions that sort of radiate throughout the entire regulatory construct here. Uh, we either have done revisions or we've defined them for the first time.
Speaker 2:Yeah, it's clear that the department has taken a huge step forward in trying to make change. Um, can you share a little more about your vision to empower patients?
Speaker 3:Yeah. We, so for example, we believe that patients can, uh, be reoriented out of the existing sort of hospital system driven model. That, that the patient as sort of an inpatient is something that we can, we, we want to sort of decenter that and make sure that the patient can care for themselves, which is what the patients want, and frankly, it's what the health sector wants. So, for example, in the patient engagement and support, uh, part of these regulations, we're now allowing the, uh, people in the healthcare sector, whether it's hospitals, physicians or whatever, to be able to provide patients with, uh, uh, particular, uh, tools that they can manage their care at home. So, for example, if a, uh, if you have a child with asthma that you could give a caregiver an air purification system so that, uh, you can possibly reduce the amount of hospitalization or returns to that. If you have a child who has an ear infection to give the parents, uh, an otoscope that ties back to the hospital's, uh, system. So that instead of bringing the, the child back to see whether their infection has been cured or not, the parent can put the otoscope into the child's ear, see whether there's an infection. The hospital can monitor that, uh, and see that it, it is or it isn't, that reduces somebody coming in over and over again to see whether that infection has been cured. Uh, or for example, if you wanted to increase adherence to a physician to going to the physician's office, which is a big issue because people, many times, as we know, use the emergency room as a way to schedule, you know, meetings with a doctor instead of going to a physician's office. Uh, if a, if somebody, if a physician has the ability to either give parking or, uh, childcare services during the time of an appointment, it increases the ability for somebody to adhere to that schedule, uh, who has a busy life, kids and so on. We think that inside the construct that we've set forward, we can be confident that this won't raise the issues of patient and program abuse, uh, that, uh, we have to remain very mindful and focused on.
Speaker 2:There's clearly a lot in the regulations and as the department is sort of lead a pathway towards improving the healthcare system, I, and I know it's, it's just a proposed rule. Uh, as you look forward though, uh, can you tell us a little bit about, about when you expect to see results? You know, I'm not asking you to, you know, forecast when the reg will drop in final, but as you look at the innovations and the, and, and the initiatives you've put forward, when do you expect that the, the larger community, the provider community, and the patient community will actually be able to benefit from, from what you're proposing?
Speaker 3:Well, I think that, well, first of all, we've, we've given a sort of slightly longer than normal period for everybody to respond to this because of the complexity of the rules. Um, so we've sort of a 75 day comment period. It's gonna end at the end of this year. We're expecting to move quickly, uh, to address comments as they come in, um, and hopefully come up with a, a strong proposal. I would say that we've already seen, um, these kinds of creative arrangements entered into, but within the context of models and one-offs. So we've already seen these things work. That's why we're somewhat confident that allowing greater flexibility and creativity on the part of the healthcare sector is warranted, because we've already seen these things operate in the limited contexts within ACOs, within the existing models, within some, you know, past demonstration projects. We've seen this, uh, work. So that's what, um, that's why the inspector general's office and CMS were, uh, able to, uh, sort of creatively engage in this regulatory endeavor. They have seen this work, they've seen it not be abused, and so they feel, uh, that they can move forward and allow greater flexibilities across the entire healthcare sector for people to engage in this, in these, these kinds of, uh, value-based arrangements.
Speaker 2:And at the end of the journey, what does success look like to you? What, what would you say, um, what would you say success would be? Yeah.
Speaker 3:Well, at the highest level, obviously what we're here about is to improve the health and wellbeing of Americans. That's the, you know, the very fundamental and very highest level of mission at hhs. But I believe that this can be a win-win. I believe that we can get both improved outcomes and lower cost. I think with the advance of technology, with the advance of, of innovation, both technologically and in systems, meaning in the ability of people to partner and affiliate with each other, we're gonna be able to see a move away from the old modes of inpatient hospitalization, the most expensive kinds of care, uh, being immediately resorted to by the public, that we are going to see the healthcare sector move away from that and into wider and, and a greater number of sites of care that we're gonna be able to see patients get more and more of their care for themselves. That is, they're gonna be able to care for themselves. They'll be to care for themselves at home and their loved ones at home. Uh, and we're gonna see a greater expansion of the ability for the healthcare sector to engage in that outside of the old fashioned, uh, inpatient hospital system. I believe the healthcare sector's moving that way anyway, it already has. Uh, we were gonna have to engage in this regulatory reform endeavor at some point. Uh, we would have to do it if, you know, why wait five or 10 years for us to see this carried out when we already knew the results of this kind of new value-based care was already instantiated in a lot of our existing models. We knew we'd have to do this regulatory reform at some point. So we might as well do it now.
Speaker 2:Well, I appreciate your vision for the future and the way you've articulated it. It does seem like it will be bright. Um, before we close, I, I just wanna have one last question with you today. Um, referencing the regulations. You were quoted yesterday as saying that the regulations are part of a much broader effort to update reform and cut back our regulations to allow innovation toward a more affordable, high quality, value-based healthcare system while maintaining the important protections patients need. Yes. Your quote started out by saying they are part of a much broader effort to update, so it suggests to me that there's more coming. So what's next? What in the queue
Speaker 3:Exactly? So, you know, this, this is parts two and three of a four part regulatory sprint to coordinated care that I have, uh, led out of my office. First part was 42 CFR part two, uh, regulations. So we've done reform on that for substance use disorder, um, and privacy. Statute two and three are dealing with, um, the Stark law and the anti kickback statute regulations. Part four is hipaa. Uh, I was just looking, uh, right before I left to announce this in Minneapolis, I was looking at our, uh, our proposals internally on hipaa. So we're gonna be dealing with hipaa, which is one of the th thornier statutes. It's not only the regulatory sprint, though we're moving forward on all kinds of payment reforms, as I'm sure you've seen, that are very complimentary to what we're doing on this underlying regulatory reform. What we're trying to do is have a suite of reforms that establish a platform for moving forward on value-based care and the regulatory sprint coordinate care, which as I said, is 42 CFR part two Stark Law and a kickback statute. And HIPAA is, I think, central to that regulatory reform effort, but it does include, uh, a lot a complimentary suite of payment reforms that we're doing, the models that are being announced, uh, sort of a host of initiatives that we're doing to kind of liberate the healthcare sector, uh, in this country and provide greater value.
Speaker 2:Well, that's great. Thank you so much, Eric. Thank you for joining us today and for everyone listening to this podcast, um, it's time to get busy. The comment period is now open.
Speaker 3:Absolutely, David, and we look forward to that. I mean, we got a huge number of thoughtful comment comments, uh, in the request for information that we did for these two regulations. And, you know, because of the complexity, depending on the pation, it could be about 800 pages between the two regulations. So we are very much looking forward to seeing what the community, the legal community, and the healthcare bar has to say about these. We've, we've got really good people looking at these things, but, uh, we also know this was a very complex endeavor to weave together two different laws, regulations with two different agencies here at hhs. So we definitely need the input and the, uh, commentary from, uh, stakeholders to make sure that this, what we've done here is, is type and is, uh, very sound.
Speaker 2:Well, we will, we will do what we can to amplify that message. I know, you know, as you as, as you know, when we work together, it's important for the public, um, to share their voice, uh, their recommendations, their concerns. So we will definitely do what we can to amplify, uh, the point that the department is very interested in getting comments, uh, from everyone impacted by the regulation. And yep, when folks are able to comment, you will end up with a better product at the end of the day. Um, so I definitely share that and we will amplify that.
Speaker 3:Thank you, David.
Speaker 2:Again, thank you, Eric, for joining us today.
Speaker 3:Appreciate it. Bye-bye.
Speaker 2:Bye now.