- HHS is in the "fermenting stage" in developing a proposed rule overhauling the Stark Law that could come by the end of 2019, HHS Deputy Secretary Eric Hargan said Wednesday.
- In tandem, a separate proposed rule to modify the Anti-Kickback Statute is being developed by the HHS Office of Inspector General, according to Kimberly Brandt, CMS principal deputy administrator for operations.
- The goal is to balance allowing providers, insurers and manufacturers broader ability to coordinate value-based care arrangements while maintaining guardrails due to the "significant threat" of "potential program integrity vulnerability or other abuses," Hargan said.
The American Hospital Association, American Medical Association and AdvaMed are among those lobbying for changes to existing regulations to allow for new types of coordinated care and value-based arrangements.
Hargan said that the Stark Law was created with good intentions to prevent physicians from referring patients to services they have a financial interest in under a fee-for-service system. But he argued the existing laws have incentivized consolidation within the healthcare industry.
"I am sympathetic to what the laws stand for as we all should be," Hargan said. "Rightly reformed, the exceptions and safe harbors within them can be reoriented, I believe, to help us transition to a new paradigm of value-based care."
The comments come a day after Sens. Bill Cassidy, R-La., and Mark Warner, D-Va., introduced draft legislation aiming to facilitate value-based arrangements connecting the price of a medical device or drug to the clinical effectiveness of the product.
Hargan said he is hopeful the Cassidy-Warner bill is "additive" and "in accord with what we do."
"This is not a legislative effort. The laws remain in place as is. This is a regulatory effort within the administration. This is an interpretation of laws, but it is not an effort to change those laws," Hargan said.
A Warner spokesperson said "it’s essential that Congress also" works towards reform that "preserves strong oversight while also encouraging additional innovation."
"Our office is aware of and supports the work being done at HHS to continue moving our health system toward one that pays for value over volume," a Warner spokesperson told MedTech Dive. "The discussion draft includes statutory language for narrow exemptions and it also gives the HHS Secretary additional authority via rulemaking."
Cassidy and Warner are asking for input on their draft legislation to be submitted by February 19.