Ascellus Blog

Final Ruling Eases Telehealth Restrictions

February 22, 2021
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In a categorical win for telehealth last year, the United States Department of Health and Human Services (HHS) amended the Stark Law and the Federal Anti-Kickback Statute (AKS) to allow disparate groups, including healthcare providers, telehealth and mHealth vendors, to work together on related health care services without risking unlawful consequences.

Enacted more than 40 years ago, the Stark Law was written to preclude physicians from referring patients to a provider with whom the physician or his family has a fiscal relationship, while the Anti-Kickback Statute was meant to prohibit compensation, defined as anything of value, for referrals payable by a federal healthcare program. These laws were originally designed to safeguard patients against poor service in a fee-for-service arrangement whereby services are paid separately, incentivizing the quantity of care model. However, these laws have resulted in prohibiting physicians, hospitals and healthcare providers from collaborating on activities that encourage value-based care, which focuses on quality of care by rewarding providers for improving patient health, reducing chronic conditions and meeting outcomes.

Since moving toward value-based care, the healthcare industry has long awaited changes that would facilitate cooperative engagement between health care providers. In addition to allowing two or more “value-based enterprises” to join efforts in coordinating patient care, the amendment also permits established health care systems to support smaller health care systems to enhance their telemedicine efforts, something that was difficult to do before the new ruling. Now, health care and telehealth providers can join forces in a value-based care system of collaborated patient care, improved outcomes, and decreased costs. 

Because AKS disallowed healthcare referrals that included offering, paying, soliciting and receiving anything of value, telehealth care was impeded due to the possibility that patients could be referred to a federal healthcare program between healthcare parties. The Stark Law also hindered telehealth by prohibiting financial relationships between physicians and organizations that billed federal healthcare programs. 

In a press release on this new ruling, American Telemedicine Association CEO Ann Mond Johnson remarked, “We applaud HHS and CMS for taking an important and urgently-needed step towards modernizing the laws that are critical to the success of the regulatory sprint to coordinated care. These new rulings move us closer to a value-based care model that will allow our healthcare system to reimagine how care is delivered and integrate telehealth with in-person care.”

Not only does this new ruling loosen restrictions on “value-based enterprises” but also, as health care adapts under the shifting weight of the COVID-19 pandemic, it gives credence to the need to expand telehealth. 

Among the final rules to the AKS safe harbors revisions, the following amendments directly affect the future of telemedicine, its expansion and accessibility:

  • Value-based Arrangements, of which there are three, are meant to encourage improved patient care by allowing for certain remuneration to be exchanged between entitled participants.
    • Care Coordination Safe Harbor, the first value-based arrangement, includes vendor-provided digital health technology in its aim to improve quality, health outcomes and efficiency.
  • Patient Engagement and Support Safe Harbor allows the use of particular tools and support, including telehealth and mHealth, to improve quality, efficiency and outcomes.
  • Cybersecurity Technology and Services Safe Harbor allows for cybersecurity. technology and services remuneration to secure sensitive information, especially as health care increases its online and telehealth presence.
  • Telehealth for In-Home Dialysis adds an exception to the Beneficiary Inducement Civil Monetary Penalty, amending the term “remuneration” to allow for advancement of value-based care for telehealth patients using in-home dialysis. 

The HHS ruling is a triumphant victory for the healthcare industry, as it facilitates its transition toward a value-based, quality-care system. And while it may be an unexpected beneficiary to the new ruling, telehealth providers are excited to work in conjunction with other healthcare organizations to augment the quality of care model.

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