The proposed changes to federal anti-kickback laws contain many favorable features, explains Thomas N. Bulleit, JD, partner with Ropes & Gray in Washington, DC. These include:

  • The changes would alter the Anti-Kickback Statute so that the onerous requirements for documenting part-time arrangements would be removed from the personal services safe harbor, allowing more arrangements to qualify;
  • Outcome-based payments (except from drugmakers, DMEPOS sellers, and laboratories) would be removed from the definition of remuneration, Bulleit notes. A payment would be outcome-based if it resulted from a collaboration to measurably improve quality of care or appropriately and materially reduce costs (or growth of expenditures) while maintaining or improving quality of care;
  • Services paid under the Inpatient Prospective Payment System would be removed from the definition of DHS. This would free up hospital relationships with physicians who do not make use of hospital outpatient services, Bulleit says;
  • The definition of fair market value would no longer be qualified by the requirement that the measurement be based on an arms-length transaction between parties not otherwise in a position to generate business for each other;
  • Productivity bonuses paid to physicians in a group practice could be based not only on personally performed services, but also on “incident to” services performed by nonphysician staff, Bulleit says;
  • The definition of when a payment arrangement “takes into account” the volume or value of referrals or other business generated would be narrowed to apply only if the formula includes referrals that result in an effect on the physician’s compensation that positively correlates with the physician’s referrals (or based on a predetermined correlation), Bulleit explains. This also works in reverse for payments from a physician to a DHS entity. It would no longer be necessary to have Stark concerns with, for example, utilization control measures that reward a reduction in medically unnecessary services, Bulleit says;
  • A new exception would allow commercially reasonable payments of up to $3,500 per year (adjusted annually for inflation) from a DHS entity to a physician for FMV items and services provided by the physician, including space and equipment rental, but excluding percent of revenue and per-unit charges “to the extent that such charges reflect services provided to patients referred.”