CMS

August 5, 2021

Posted on by Courtney Patterson

QUESTION:
“Can you provide a quick guide to the Stark Value-Based Exceptions?”

ANSWER:
While these Rules are difficult to summarize and the devil is in the details, the following is a summary of the Stark Value-Based Rules that became effective on January 19, 2021:

A Value-Based Arrangement is intended to compensate the physician Value‑Based Participants of a Value Based Enterprise for achieving the Value‑Based Purposes of the Value-Based Activity for a Target Patient Population, rather than basing that payment on the items or services furnished by the physicians.

CMS stated in the Preamble to the January 19, 2021 Rules that the anticipated benefits from the Value-Based Rules are to:  improve care coordination for patients; reduce cost to payers and patients from poorly coordinated, duplicative care; improve quality of care and outcomes; achieve substantial reduction in Stark Law compliance costs; and reduce administrative complexity and related waste.

Whether the Value-Based Rules will achieve any or all of these benefits remains to be seen.  What is clear is that the Value-Based Rules have requirements that are significantly different from the requirements in fee-for-service arrangements that were governed by the Stark Rules that have been previously in effect.  The Value-Based Rules have different requirements depending on the level of financial risk assumed by the physician Value-Based Participants.

The Stark exceptions for Value-Based Arrangements went into effect on January 19, 2021 and are found at § 411.357(aa)(1)-(3).  While each Value-Based Exception needs to be considered to determine which will apply,  there are several elements that all of the exceptions have in common: (i) the Value-Based Definitions found at 42 C.F.R. § 411.351; (ii) as the Value-Based Enterprise (“VBE”) and/or VBE participants increase the financial risk assumed, the applicable Stark Value‑Based Exception will allow for increased flexibility; (iii) the traditional definition of Fair Market Value is not required by any of the Stark Value-Based Rules; (iv) the remuneration to the VBE participants cannot constitute an inducement to limit services; (v) the remuneration to the VBE participants cannot be conditioned on the referral of patients who are not part of Target Patient Population; (vi) if remuneration is conditioned on referrals to a particular provider, then the referral arrangement must be in writing, signed by the parties, and must include the three exceptions contained in the Stark directed referral rules; and (vii) records of the compensation methodology used must be retained for six years and provided to HHS upon request.

The Stark Rules then categorize the Value-Based Exceptions based on the level of financial risk assumed with the greatest flexibility provided to a VBE that accepts Full Financial Risk which means the Value-Based Enterprise is responsible on a prospective basis for the cost of all patient care, items and services covered by the applicable payor for each patient in the Target Patient Population for a specified period of time (such as accepting capitation).

The next greatest amount of flexibility is permitted for Value-Based Arrangements with meaningful downside risk to the physicians.  Meaningful Downside Financial Risk requires the physicians to be responsible to repay or forego no less than 10% of the Total Value of the remuneration the physician receives under the Value-Based Arrangement.  Examples of this model provided by CMS in the Preamble to the January 19, 2021 Rules include:  a $50,000 payment, plus $25,000 for Value-Based Activities as long as the entire $25,000 is conditioned on achieving a specified Value-Based Activity for a Target Patient Population; and a $100,000 payment with a $20,000 withhold, so long as the withhold is only payable upon completing the Value-Based Activities for the Target Patient Population.

There is also a Value-Based Exception in which the Physicians are not placed at financial risk.  This is referred to in the regulations as the Value-Based Arrangements Exception, 42 C.F.R.  § 411.357(aa)(3).  This exception protects remuneration paid to the physician participants in the Value-Based Arrangement regardless of whether it is in cash or in kind.  However, due to the fact that the physicians are not at financial risk and are not required to be paid at Fair Market Value, this exception has the most detailed regulatory requirements of any of the Stark Value-Based Rules.

In addition to the terms described above, this exception requires that the Value-Based Arrangement must be set forth in writing that is signed by the parties and describes: (i) the Value‑Based Activities to be undertaken; (ii) how the Value-Based Activities are expected to further the Value‑Based Purposes of the Value-Based Enterprise; (iii) the target patient population; (iv) the type or nature of remuneration; (v) the methodology that is to be used to determine that remuneration; and (vi) the Outcome Measures against which remuneration is assessed.

CMS also requires that at least annually, or at least once if the arrangement is in effect for less than one year, the Outcome Measures must be monitored to determine: (i) whether the parties have provided the Value-Based Activities required by the Value-Based Arrangement; (ii) whether and how the continuation of the Value-Based Activities will further the Value-Based Purposes of the VBE; and (iii) the progress toward the attainment of the Outcome Measures against which the recipient of the remuneration will be assessed.

If this monitoring determines that the Value-Based Activity is not expected to further the Value‑Based Purposes of the VBE, then the VBE has two options in order to maintain compliance with the Stark Law:  (1) terminate the arrangement within 30 consecutive calendar days of the date of completion of the monitoring indicating that the Value-Based Activity was ineffective; or (2) modify the Arrangement to terminate the ineffective Value-Based Activity within 90 consecutive calendar days of completion of the monitoring and, if they choose, replace that Value-Based Activity with a different Value-Based Activity with prospective applicability.

While several differences exist between the Stark Value-Based Exceptions and the OIG Value‑Based Safe Harbors that also went into effect on January 19, 2021, this exception is the greatest point of departure from the OIG Value-Based Safe Harbors (42 C.F.R. § 1001.952(ee)-(kk)).  If a physician is not at financial risk, then the OIG Safe Harbors only protect in-kind remuneration.  (As stated above, the Stark exception protects remuneration in the form of cash or in-kind services.)  That said, payments of cash remuneration in a non-risk setting (such as a cost‑sharing arrangement) may be protected by the amended personal services and management contracts and outcomes-based arrangements safe harbor that was added by the January 19, 2021 Safe Harbor Regulations (see 42 C.F.R. § 1001.952(d)(2)).

July 1, 2021

Posted on by Courtney Patterson

QUESTION:   “In reference to the case in this week’s HLE, does EMTALA apply to inpatients?”

ANSWER:      The obligations under EMTALA do not apply to a hospital once a patient is admitted as an inpatient in good faith.

However, the issue in the Harmon case was whether the patient had been formally admitted as an inpatient or simply placed in observation. If it is ultimately determined that the patient had been admitted as an inpatient, then he will no longer have a claim under EMTALA, as the Hospital’s obligation to effectuate an appropriate transfer would have ended prior to his attempt to kill himself by jumping out of the car during the transfer to the other facility.

Conversely, if it is determined the patient was put into observation but not admitted as an inpatient, he will be free to pursue his EMTALA claim. This is because CMS has stated that such action does not end a hospital’s EMTALA obligations. This can be found in the Interpretive Guidelines, which state:

“Individuals who are placed in observation status are not inpatients, even if they occupy a bed overnight. Therefore, placement in an observation status of an individual who came to the hospital’s [emergency department] does not terminate the EMTALA obligations of that hospital or a recipient hospital toward the individual.” (Emphasis added)

TAG A-2411/C-2411, Rev. 191,07-19-19

The court in Harmon cites entries in the patient’s medical record that support both arguments (i.e., that the patient was admitted vs. put into observation), so it declined to make a finding on this factual question at this point in the litigation.

February 11, 2021

Posted on by jwilbert

QUESTION:        I hear that the new Stark regulations have a way that Stark violations can be corrected without penalty.  Is that so?

ANSWER:           Yes, within limits.  CMS has now given hospitals and doctors a new way to correct noncompliance with the Stark law without having to make a self-disclosure.  The regulations, which became effective on January 19, 2021, contain a new regulation at 42 CFR §411.357(h) that allows parties to a compensation arrangement to reconcile all discrepancies while a contract is in effect or up to 90 days after it terminates so long as after the reconciliation the arrangement fully complies with all elements of the applicable exception.

For example:  say a hospital contract with a medical director calls for payment at $140 per hour but the doctor is paid $150 per hour.  If $150 still is within FMV range, all that is necessary is to reflect that in amendment going forward.  If the amount actually paid exceeds fair market value, the contract can be amended to recoup payments in excess of FMV via an offset against amounts due in the future (e.g., a payroll deduction) while the relationship is in effect, but the entire amount of the excess must be recouped within 90 days after the contract ends.

CMS also said that not every error will cause a financial relationship to be out of compliance with Stark nor must every mistake or error be corrected in order to maintain compliance.  Administrative and operational errors that are identified and rectified in a timely manner will not cause a relationship to be out of compliance.  In addition, CMS said that not all transfers of remuneration create compensation arrangements.  Examples include mistaken payments that are never identified, theft, use of office space not in lease, use of equipment beyond the expiration of the lease term or slight deviation from written agreement such as a one-time incorrect rental payment.

This new option is a great alternative to resorting to the Stark self-disclosure protocol.  To learn more about it, stay tuned for an upcoming Health Law Expressions podcast, where Horty Springer attorneys Josh Hodges and Dan Mulholland will discuss this new rule, or e-mail them at jhodges@hortyspringer.com or dmulholland@hortyspringer.com.

 

January 21, 2021

Posted on by hortyspringer

QUESTION:        I’ve heard that the Centers for Medicare & Medicaid Services (“CMS”) has recently begun a new program called “Acute Hospital Care at Home.”  Can you explain more about this?  Is this related to the Hospitals without Walls initiative?

 

ANSWER:          The Acute Care Hospital at Home program builds upon Hospitals without Walls, which provided broad regulatory flexibility to allow hospitals to provide services in locations beyond their existing campus.  After considerable study and research, CMS determined that over 60 different acute conditions could be treated appropriately and safely in home settings with proper monitoring and treatment protocols.

Note that this is different from more traditional home health services.  Acute Hospital Care at Home is for beneficiaries who require acute inpatient admission to a hospital and who require at least daily rounding by a physician and a medical team monitoring their care needs on an ongoing basis.

In late November, there were six health systems who had received approval for new waivers under the program.  By mid-January, the program had expanded to include 88 hospitals across 24 different states.

To enter the program, hospitals must submit a waiver request to CMS.  There is an abbreviated process available, but most hospitals will be required to submit a detailed waiver request.  As part of this request, the hospital will need to show that it can provide or contract for services such as:

  • Pharmacy
  • Infusion
  • Respiratory Care (including oxygen delivery)
  • Diagnostics (labs, radiology)
  • Monitoring (with at least 2 sets of patient vitals daily)
  • Transportation
  • Food Services (including meal availability as needed by the patient)
  • Durable Medical Equipment
  • Physical, Occupational, and Speech Therapy
  • Social Work and Care Coordination

More information is available on the CMS website, including an FAQ document.  CMS also held a conference call on December 22, 2020, which explained further details of the program (transcript and recording available here).  We expect that more information will be made available in the near future as the program evolves.

November 5, 2020

Posted on by hortyspringer

QUESTION:        I know that the Centers for Medicare and Medicaid Services (“CMS”) have made certain regulatory flexibilities available in response to the public health emergency.  Where is the best place to learn more about these changes?

 

ANSWER:           CMS has made available a large amount of material relating to COVID-19 on its website, but it isn’t always easy to find a specific piece of information (or to know when something’s been recently updated).  Speaking generally, the best starting point for research is the agency’s “Current Emergencies” page, which you can find here.  It’s a bit overwhelming at first, but I would first suggest that you focus on the link that says:  “Get waiver & flexibility information.”  This will take you to a new page that lists “Waivers & flexibilities for health care providers.”  You can skim that list to look for items that may be relevant to your question.  I often scroll down to the “provider-specific fact sheets” when I am beginning my research.

Be careful of relying too heavily on any one document, unless it is crystal clear.  These guidance pages are being updated regularly, and we have encountered numerous situations where the information provided can be misleading or seriously incomplete.  Although it’s not always possible, it’s good if you can locate relevant material from a regulation.

If you have a question about a recent change to a policy, be aware that the agency may not yet have an answer for you.  Under these circumstances, it may be helpful to check this list of CMS podcast transcripts to look for recent updates.  The “CMS Office Hours” calls will often have transcripts that you can search.  (If you have the time, you can also call into one of the agency’s “Office Hours” calls directly.  Agency representatives make themselves available to answer questions related to the Medicare program.)

These online resources can be a helpful way to answer run-of-the-mill questions, but we would encourage you not to rely on them for more important matters.  In those cases, it’s best to seek legal counsel.

September 24, 2020

Posted on by hortyspringer

QUESTION:         May a physician be on-call for more than one hospital at the same time (take “simultaneous call”) or perform elective surgeries while on call?  If so, is that physician required to identify a specific back-up physician who will take calls at our hospital if the original physician is called to another hospital or is in the middle of an elective surgery when called by our hospital?

 

ANSWER:           CMS doesn’t specifically require that another physician be identified to take back-up call if the original on-call physician is performing elective surgery or is taking call at another hospital when the ED needs assistance.  Instead, CMS says that a “back-up plan” must be in place.  Per CMS, “some hospitals may employ the use of ‘jeopardy’ or back-up call schedules,” indicating that other hospitals may choose to not use back-up call schedules.  Here’s the full quote from the EMTALA Interpretive Guidelines (found in Appendix V of the Medicare State Operations Manual):

The [hospital’s] policies and procedures must also ensure that the hospital provides emergency services that meet the needs of an individual with an EMC [Emergency Medical Condition] if the hospital chooses to employ any of the on-call options permitted under the regulations, i.e., community call, simultaneous call, or elective procedures while on-call. In other words, there must be a back-up plan to these optional arrangements. For instance, some hospitals may employ the use of “jeopardy” or back-up call schedules to be used only under extreme circumstances. The hospital must be able to demonstrate that hospital staff is aware of and able to execute the back-up procedures.

https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_v_emerg.pdf

Of course, a hospital may decide that it’s On-Call Policy will not permit simultaneous call or elective surgeries while on call.  Or, a hospital’s policy may require on-call physicians to identify a specific individual to provide back-up coverage in such cases.  The key is to clearly identify the requirements in the hospital’s On-Call Policy.

September 10, 2020

Posted on by hortyspringer

QUESTION:        I heard that the Centers for Medicare & Medicaid Services (“CMS”) recently announced a new payment model, referred to as the “Community Health Access and Rural Transformation (“CHART”) Model.”  Can you provide a brief overview of this?  Is participation mandatory or voluntary?

 

ANSWER:          CHART is a voluntary payment model intended to improve health care quality in participating rural communities.  Participating rural communities have the option to choose between one of two different “tracks.”  The first is labeled the Community Transformation Track, which builds upon certain lessons learned from the Maryland Total Cost of Care Model and the Pennsylvania Rural Health Model.  To participate, communities must identify a Lead Organization (such as a local public health department or health system).  In exchange for spearheading efforts to implement health care redesign in the targeted community, the Lead Organization is eligible to receive up to $5 million in funding.  This track is scheduled to begin in July of 2021.

The second is the ACO Transformation Track.  This enables rural accountable care organizations (“ACOs”) to receive advance shared savings payments.  CMS hopes that these advance payments will encourage rural ACOs to advance more quickly into models that involve downside risk (i.e., two-sided risk models).  This track is scheduled to begin in January of 2022.

It is important to keep in mind that the CMS Innovation Center is designed to test and experiment with various payment and service delivery models, which means that its initiatives often involve significant risk and uncertainty.  CHART is no different.  Although the agency hopes that this will result in improved health care quality at reduced cost, there are key obstacles that the agency (and the participants) will need to overcome.  For example, what sorts of entities are well-qualified to serve as a community’s Lead Organization (responsible for developing a strategy to redesign the community’s health care delivery system)?  How effective will the participants be in redesigning their health care delivery systems while simultaneously juggling the demands of the COVID-19 pandemic?  Assuming that rural ACOs do choose to accept downside risk, how resilient will they be if obstacles or mistakes cause them to fall short of their goals?

If participants are able to navigate through and ultimately overcome these obstacles, it will be a promising sign for the future of large-scale efforts to promote value-based payment systems nationwide.

August 27, 2020

Posted on by hortyspringer

QUESTION:        Are there new Medicare Conditions of Participation (“COPs”) for hospitals and critical access hospitals (“CAHs”)?

ANSWER:          Yes. As background, on March 4, 2020, CMS issued guidance stating that hospitals should inform certain individuals and entities regarding persons who have COVID-19. This week, as alluded to in Your Government at Work, CMS issued an interim final rule (“IFC”) which requires hospitals and CAHs to report data regarding COVID-19 in a standardized format. The new COPs are at §§ 482.42(e) for hospitals and 485.640(d) for CAHs, and the purpose is to track the incidence and impact of COVID-19 to help public health officials detect outbreaks.

The IFC emphasizes that the new COPs “do not relieve a hospital or a CAH, respectively, of its obligation to continue to comply with §§ 482.42(a)(3) or 485.640(a)(3), each of which requires a facility to address any infection prevention and control issues identified by public health authorities.”

The new COPs will become effective once the IFC is published in the Federal Register.

August 6, 2020

Posted on by hortyspringer

QUESTION:        I heard that CMS has proposed to extend some of the new telehealth flexibilities.  Can you provide a little more information on this?

ANSWER:            On Tuesday morning, the Centers for Medicare & Medicaid Services (“CMS”) submitted a proposed rule regarding revisions to payment policies under the Physician Fee Schedule.  This proposed rule is available for public inspection in the Federal Register and is scheduled for publication on August 17th, 2020.  The proposed rule addresses a wide range of topics.  Among other things, CMS has proposed adding certain services to the Medicare Telehealth Services list permanently and has suggested that certain flexibilities will remain in place through the calendar year in which the public health emergency ends.  Furthermore, CMS has expressed a willingness to solicit and use input from practitioners to determine whether further permanent changes should be made to the Medicare telehealth services list.

In the proposed rule, CMS noted that it had received a significant number of requests to add physical therapy, occupational therapy, and speech-language pathology services to the Medicare telehealth services list permanently.  The agency explained that even though there are waivers in effect during the current public health emergency, its authority would be limited to some degree by statute.

CMS also reiterated its policy that telehealth rules do not apply when the beneficiary and the practitioner are in the same location, even if audio-visual technology assists in furnishing a service.  This was done in response to a number of questions about whether services should be reported as telehealth when the individual physician or practitioner furnishing the services is in the same location as the beneficiary.

In addition, CMS addressed questions about payment for audio-only telehealth services.  The agency explained that it was also limited in this area by statutory requirements relating to telehealth services (which typically require an interactive telecommunications system that includes two-way, audio-visual communication technology).  The agency noted its willingness to explore other potential improvements, and invited comment on certain kinds of telephone-only check in services.

Notably, this is only a brief overview of some of the changes included in the proposal.  It is important to emphasize that these policies are not yet finalized and may change significantly in the following weeks.  Nevertheless, the proposed rule does indicate that the agency is focusing its attention on making certain telehealth flexibilities permanent, to the extent its authority will allow.  For a fact sheet that discusses the proposed rule, click here.  To review the full proposed rule, click here.

July 9, 2020

Posted on by hortyspringer

QUESTION:        We’ve had some debate over who can order therapeutic diets.  Can you help explain the rules on this issue?

 

ANSWER:            Historically, CMS has restricted the ability to order therapeutic diets to “practitioners responsible for the care of the patient.”  This generally meant physicians.  However, CMS changed its position on this matter in its Final Rule dated May 12, 2014 by revising 42 C.F.R. §482.28(b)(2) to read “All patient diets, including therapeutic diets, must be ordered by a practitioner responsible for the care of the patient, or by a qualified dietician or qualified nutrition professional as authorized by the medical staff and in accordance with State law governing dieticians and nutrition professionals.” (Emphasis added.)

This change came about largely in recognition of the fact that registered dietitians are trained to order patient diets independently, without requiring the approval or supervision of a physician.  In order to give hospitals more flexibility in this area, CMS noted that “[i]n order for patients to have access to the timely nutritional care that can be provided by [registered dieticians], a hospital must have the regulatory flexibility either to appoint [registered dieticians] to the medical staff and grant them specific nutritional ordering privileges or to authorize the ordering privileges without appointment to the medical staff, all through the hospital’s appropriate medical staff rules, regulations, and bylaws.”  This means that in order for a dietician to order patient diets independently, clinical privileges must be granted and monitored by the medical staff.

We have not seen any medical staffs elect to make dieticians full members.  Instead, the most common approach we have seen is to adopt a stand-alone policy that states that any requests for ordering privileges would be processed through the Medical Staff process, while the rest of the dietician’s practice would continue to be monitored through HR.

Of course, your state law may still limit a dietician’s scope of practice, so be aware of any restrictions at the state law level.