Life Science Compliance Update

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April 12, 2018

Coming into the Modern Era - CMS Creates Interagency Task Force to Examine Alternative Payment Mechanisms

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To control rising costs under Medicare, the Affordable Care Act, and Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”) created some “value-based programs” (“VBPs”) which provide incentives for cost cutting while ensuring the quality of patient care. VBPs inherently rely on collaboration between referring physicians and other healthcare providers as well as share Electronic Health Record (“EHR”) systems, thereby conflicting with the old fee-for-service fraud protection provided by the Anti-Kickback Statute and the Stark Law. CMS Administrator Verma recently called for an interagency task force to study removal of these barriers to new, cost-effective methods of healthcare delivery under Medicare. However, the administrator notes that real progress on this issue may require Congressional action as well.

Complaints about existing regulatory schemes being out of touch with the marketplace are not a new phenomenon. In fact, as technology continues to evolve, being “out of touch rapidly” is inevitable. Being “out of touch” seems especially acute in the world of healthcare payments, where laws created for one billing model (e.g., fee for services) do not appear fit for purpose when it comes to novel concepts such as value-based medicine.

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