HHS Releases Long-Awaited Rules Reforming Stark & Antikickback Statute Regulations

On Wednesday, HHS released two separate rules directed at reforming fraud and abuse regulations to better reflect the administration’s goal of moving the health care system toward value-based payment and delivery models. The first, is a proposed rule from the Centers for Medicare and Medicaid Services (CMS) which seeks to reform the physician self-referral prohibitions (a.k.a. “the Stark law”) and the corresponding exceptions that allow some compensation arrangements to avoid running afoul of the law and regulations. CMS has received numerous stakeholder complaints over the years that the Stark rules have inhibited the ability of providers to create and implement value-based payment arrangements and have served as a barrier to moving toward alternative payment models (APMs). The proposed rule includes exceptions for compensation arrangements that qualify as “value-based arrangements.” CMS also provides additional guidance as well as a new exception directed at donations of cybersecurity technology. The second, is a proposed rule from the HHS Office of the Inspector General (OIG) which seeks to make parallel policies that would provide protections for value-based arrangements under the Antikickback Statute (AKS) (and corresponding Civil Monetary Penalties (CMP) statute). The proposed rules also provide a cybersecurity technology donation safe harbor and a provision directed at protecting beneficiary incentives for utilization of telehealth for certain in-home dialysis patients. The rules have yet to be published in the Federal Register, but according to a CMS Fact Sheet, comments will be due by December 31, 2019.

House Continues Work to Address Surprise Billing

As Congress returns from a two-week recess, two key House Committees – Ways and Means and Education and Labor -- plan to move forward with their own surprise billing legislation. While neither committee has formally announced a date to markup the critical legislation, Ways and Means Committee Chairman Richard Neal (D-Mass.) sent a letter to his Democratic committee colleagues proposing negotiated rulemaking to “address the [payment] disagreements” related to surprise medical bills, noting that “[t]his process has already been successfully used in the healthcare context.” Given the initial reaction to the proposal, Chairman Neal reportedly has since indicated that the Committee may opt to move in a different direction.

Members of the Education and Labor Committee are also continuing their work on surprise billing and will likely use the introduced version of H.R. 3630, the No Surprises Act, as the starting point for their deliberations. H.R. 3630 was reported out of the Energy and Commerce Committee in July but was also referred to the Education and Labor Committee for consideration. However, 20 members of the committee are cosponsors of a competing bill, H.R. 3502, the Protecting People From Surprise Medical Bills Act, introduced by Reps. Raul Ruiz (D-Calif.) and Phil Roe (R-Tenn.). While H.R. 3502 includes a comprehensive independent dispute resolution (IDR) process, it was reported that CBO stated in an email that the IDR process as proposed in this bill would cost “double digit billions”. The cost may complicate inclusion in a final bill. While the bill that came out of Energy and Commerce also has an IDR, it is very limited in its scope so the provider community would like to see additional improvements.

On the Senate side, Health, Education, Labor, and Pensions (HELP) Committee Chairman Lamar Alexander (R-Tenn.) continues to work with Sen. Bill Cassidy (R-LA) on inclusion of an IDR process in the HELP-passed product.

Trump Signs Two Executive Orders Intended to Reign in Federal Bureaucracy

Last Wednesday, President Trump signed two executive orders focused on reining in federal bureaucracy. The first order noted that “[a]gencies shall act transparently and fairly with respect to all affected parties, as outlined in this order, when engaged in civil administrative enforcement or adjudication,” while the second one requires public comment on certain guidance documents. In contrast to the Obama administration, which had a focus for broadening the scope of regulatory interpretation to include letters, memos, blogs, and brochures, these two executive orders are intended to reduce the reach of federal agency interpretations. In response to signing the orders, Public Citizen issued a press release stating that “regulatory guidance has been crucial to protecting the public in countless ways” and noted that the new orders would undermine the FDA’s ability to implement a ban on flavored vaping products.

Members of Congress Ask Attorney General to Review Purdue Pharma’s Proposed Bonuses

On October 7, Representatives Bustos (D-Ill.) and Burchett (R-Tenn.) wrote to Attorney General William Barr, expressing “deep concern” about reports that Purdue Pharma is seeking court permission to make bonus payments of up to $38 million to employees in the midst of its bankruptcy proceedings. The two lawmakers have previously introduced the No Bonuses in Bankruptcy Act of 2019, which would prevent companies in bankruptcy proceedings from paying bonuses to certain employees. The letter requests that the Department of Justice seek additional information on the proposed bonus payments, including which employees making more than $250,000 annually are to receive these bonuses and what the rationale is for providing bonuses at this time. Purdue is in bankruptcy proceedings as a result of extensive litigation alleging that the company improperly marketed its opioid medications, thereby contributing to the national opioid crisis.

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