Device Industry Backs Proposed Changes to Anti-Kickback Statute, Stark Law

Device industry group AdvaMed on Wednesday pledged its support for proposed the Department of Health and Human Services (HHS) changes to modernize and clarify the regulations that interpret the physician self-referral law, known as the “Stark Law,” and the federal anti-kickback statute.

In addition to addressing concerns that these laws unnecessarily limit the ways in which health care providers can coordinate care for patients, the proposed rule from HHS’ Office of the Inspector General (OIG) seeks to better define what a medical device manufacturer is, as “there is no specific definition of a device manufacturer or medical device manufacturer in the Medicare program.

“We also are considering, and seek comment on, whether any definition of ‘device manufacturer’ should include an entity that manufacturers any item that requires premarket approval by, or premarket notification to, the FDA or that is classified by the FDA as a medical device,” the proposal says, noting: “Making distinctions by product or arrangement type might alleviate some of the difficulty presented by the increasing integration of healthcare company business lines and the movement of traditional healthcare companies into digital health technology.”

Once finalized, the rule would add safe harbor protections under the anti-kickback statute for certain coordinated care and associated value-based arrangements between or among clinicians, providers, suppliers and others that meet all safe harbor conditions.

Scott Whitaker, president and CEO of AdvaMed, said: “HHS’s proposed rule would establish new and modernized safe harbors under the AKS reflecting AdvaMed priorities. These include three new safe harbors for value-based arrangements – related to exchanges of remuneration and arrangements with financial risk – and proposed modifications to existing safe harbors, including for warranties. CMS’s proposed rule would also add value-based exceptions to the Stark Law to give health care providers added flexibility to improve the quality of care for patients.”

In addition, the OIG’s proposed rule would add a new safe harbor for donations of cybersecurity technology and amend the existing safe harbors for electronic health records arrangements, warranties, local transportation, and personal services and management contracts.

HHS Proposes Stark Law and Anti-Kickback Statute Reforms to Support Value-Based and Coordinated Care