As discussed in a previous McGuireWoods alert, on Oct. 9, the Department of Health and Human Services (HHS) announced two proposed rules to significantly amend the Physician Self-Referral Law (Stark Law), the federal Anti-Kickback Statute (AKS) and the Civil Monetary Penalties (CMP) Law. This client alert, the second in McGuireWoods’ summary series on these proposed rules, focuses on proposed revisions to the statutory exception for furnishing telehealth technologies to certain in-home dialysis patients, as well as CMP Law beneficiary inducement changes.
The proposed rules stem from HHS’ Regulatory Sprint to Coordinated Care (discussed in a Sept. 26, 2018, client alert), intended to incentivize value-based arrangements and patient care coordination by expressly permitting certain activities that could be deemed problematic under current law. The proposed rules, respectively released by HHS’ Centers for Medicare & Medicaid Services and the HHS Office of Inspector General (OIG), would add new value-based exceptions to the Stark Law and additional safe harbors under the AKS.
In addition to those value-based arrangement changes, other proposed changes to OIG’s regulations are likely to ease certain burdens for healthcare providers and provide greater flexibility under these federal fraud and abuse rules, particularly regarding the furnishing of telehealth technologies to certain in-home dialysis patients. The following outlines these changes, intended to reduce the burdens of the CMP Law, which imposes penalties against any person offering or transferring remuneration to a federal healthcare program beneficiary that is likely to influence the beneficiary’s selection of a particular provider.
The HHS proposed rule includes several amendments related to the beneficiary inducements CMPs, including (1) changes to the definition of “remuneration” to add an exception for “telehealth technologies” furnished to certain in-home dialysis patients; and (2) a new safe harbor for patient engagement and support arrangements and modifications to the existing local transportation safe harbor, which would, by operation of law, serve as exceptions to the beneficiary inducements CMP prohibition’s definition of “remuneration.” These proposals are discussed below.
Statutory Exception for Telehealth Technologies for In-home Dialysis
The proposed rule aims to amend 42 CFR §1003.110 to formally implement the Budget Act of 2018 amendments to the beneficiary inducements CMP definition of “remuneration.” Pursuant to the terms of the proposed rule, there would be “an exception for the provision of certain telehealth technologies related to in-home dialysis services to the definition of ‘remuneration.’” The intent of the proposed rule is to allow end-stage renal disease (ESRD) patients who receive home dialysis to obtain monthly ESRD-related clinical evaluations via telehealth technologies, so long as certain other conditions are met.
According to the proposed rule, “telehealth technologies” would be defined as “multimedia communications equipment that includes, at a minimum, audio and video equipment permitting two-way, real-time interactive communication between the patient and distant site physician or practitioner used in the diagnosis, intervention or ongoing care management, paid for by Medicare Part B, between a patient and the remote healthcare provider. Telephones, facsimile machines, and electronic mail systems do not meet the definition of ‘telehealth technologies.’” Although, note, OIG said it would not consider smartphones to be “telephones” if they have two-way video conferencing applications.
To take advantage of this new exception to the definition of “remuneration” in the beneficiary inducements CMP, the ESRD patient must receive the telehealth technology after Jan. 1, 2019; the ESRD patient must be receiving home dialysis that is paid for under Medicare Part B; and the technologies must be furnished by the patient’s provider or dialysis facility. As clarification of the statute stating that the technologies must be furnished by the patient’s provider or dialysis facility, OIG plans to require that any such technologies come from the provider or facility that is then-providing services like home dialysis, telehealth visits, or other ESRD care to the patient. The intent is to prevent someone from attempting to steer a patient to a particular provider or supplier to form a clinical relationship through such telehealth technology.
In addition, the proposed rule mirrors the statute to require that “(i) the telehealth technologies are not offered as part of any advertisement or solicitation; [and] (ii) the telehealth technologies are provided for the purpose of furnishing telehealth services related to the individual’s end stage renal disease.” Providers should be aware that OIG proposes to also require that any provided telehealth technology (a) significantly add to the provision of the beneficiary’s telehealth services in connection with his or her ESRD; (b) not be of excessive value (e.g., cannot provide a $600 smartphone when a $300 smartphone would adequately run the technology); and (c) not be “duplicative of technology that the beneficiary already owns if that technology is adequate for the telehealth purposes.”
Other safeguards OIG is considering in connection with this proposed rule, and for which it solicited comments, include the following:
- Whether to require providers and dialysis facilities to provide telehealth technology consistently, either to all Medicare Part B ESRD patients or to all who meet certain criteria
- Whether to limit the provision of telehealth technology to only those patients who do not currently have the kind of technology necessary for telehealth services
- Whether to require an explanation to patients, in writing, about why they are receiving the technology and any “hidden” fees related to the technology
- Whether to require providers and dialysis facilities that provide telehealth technology to “advise patients when they receive such technology that they retain the freedom to choose any provider or supplier of dialysis services and to receive dialysis in any appropriate setting”
New Safe Harbor and Modification to an Existing Safe Harbor
OIG also proposed a new safe harbor for patient engagement and support arrangements (42 CFR § 1001.952(hh)) and proposed modifications to the local transportation safe harbor (42 CFR § 1001.952(bb)), which function as exceptions to the definition of “remuneration” in the beneficiary inducements CMP prohibition, as well as safe harbors to the AKS.
- New Safe Harbor ─ Arrangements for Patient Engagement and Support to Improve Quality, Health Outcomes and Efficiency
OIG proposed to establish a new safe harbor at 42 CFR § 1001.952(hh) to “protect certain arrangements for patient engagement tools and supports to improve quality, health outcomes, and efficiency furnished by VBE [value-based enterprise] participants … to specified patients.” This new “patient engagement and support safe harbor” is intended to help providers keep patients involved in their care and help patients take steps to make informed healthcare decisions and to maintain or improve their health, without AKS and beneficiary inducements CMP barriers.
Specifically, under the proposed safe harbor, “remuneration” under AKS “would not include in-kind patient engagement tools or supports … furnished directly by a VBE participant … to a patient in a target patient population … that are directly connected to the coordination and management of care …, provided that all of the conditions of proposed [42 CFR §] 1001.952(hh) are satisfied.” However, there may be limitations on those who could offer such patient engagement tools or supports, those who could receive such tools or supports, and on what could be offered.
- Modifications to Safe Harbor ─ Local Transportation
OIG acknowledged in the proposed rule that transportation plays a significant role in patients’ “access to care, quality of care, healthcare outcomes, and effective coordination of care for patients, particularly for patients who lack their own transportation or who live in ‘transportation deserts.’” Therefore, as discussed in an Oct. 28, 2019, McGuireWoods alert, OIG is taking this opportunity to reconsider certain provisions of the existing local transportation safe harbor (currently codified at 42 CFR § 1001.952(bb)) and, in conjunction with this, proposing the new patient engagement tools and support safe harbor, which could also include certain transportation services.
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Through these proposals, OIG seeks to remove key CMP Law burdens on providers, without creating substantial risk of increased fraud and abuse. Overall, many providers will likely support these proposed changes, notwithstanding that existing provider arrangements may need to be adjusted, reformed or terminated to comply with the proposed amendments.
The proposed changes are subject to a public comment period, open until Dec. 31, 2019. Please do not hesitate to contact a McGuireWoods attorney or one of the authors of this alert for more information regarding these proposed rules or for assistance in preparing a comment to these rules. After the open comment period, the government will review and may finalize the rule with any desired changes to reduce CMP Law burdens on providers as soon as early 2020.
Given the significance of these proposed changes, McGuireWoods plans to provide additional analysis and summaries on these proposals in the coming weeks. To review additional guidance on the proposed rules, click on the links at the bottom of McGuireWoods’ Oct. 10, 2019, alert.