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0:58

Uh , welcome everyone to today's A HLA

1:01

podcast where we will be talking about

1:03

value-based care and, and more specifically,

1:05

the Stark and kickback value-based enterprise

1:08

rules , uh, the VBE rules that

1:10

have been around since January of 2021.

1:13

Uh, there's so much we could cover related

1:16

to vbe, and you're seeing , uh,

1:18

throughout a HLA lots of more talk

1:20

about , uh, VBS as well. And,

1:22

and our hope today is to give just a

1:24

brief overview for framing purposes,

1:26

but then to focus on some trends , uh,

1:29

that we're seeing , uh, how these rules are actually

1:31

being used and some, some, hopefully

1:33

examples of, of VPs that could

1:36

be implemented. And as , as

1:38

those of you that have dug into these rules, know there have

1:40

been government examples , um, there's

1:42

some examples maybe that some of us are already seeing

1:44

in the market, and then some that maybe we're

1:47

just, you know, kind of thinking of and, and, and

1:49

may maybe are looking to implement

1:51

down the road. Uh, today's

1:53

podcast is brought to you by the American

1:55

Health Law Association's Fraud and Abuse Practice

1:58

Group. I currently chair the

2:00

Practice Group, and our mission is to help our members stay

2:03

informed about healthcare fraud and abuse and

2:05

compliance issues. Um, our vice

2:08

chairs , our speakers, our authors, and our

2:10

other volunteers are doing a , a really good job of

2:12

developing webinars , uh, publications

2:15

and other types of content to

2:17

educate our members on , uh, important

2:19

compliance developments and trends that

2:21

we're seeing in the industry. Um , my

2:23

guests today are Tony Meda from McDermott

2:25

and Jennifer Michaels from Asbury . Uh,

2:27

both are well-known in the industry, especially

2:30

on this topic. Uh, if you

2:32

attended the ALA's Fraud and Compliance

2:34

Forum , uh, back in September, you

2:37

may have attended their session called , uh,

2:39

Value-Based Arrangements and Navigating the

2:41

Fraud and Abuse Laws. Uh, the session was,

2:44

was excellent. I was in , I, I attended it

2:46

and it included some great case studies

2:48

and, and hypotheticals. Um, also

2:51

back in September of 2023

2:53

, uh, Tony and his McDermott

2:55

colleagues authored an article , uh,

2:57

called Value Add or Valiant

3:00

Effort, examining how to use the value-based

3:02

safe harbors and exceptions for physician

3:04

arrangements. And that was in ALA's , uh,

3:07

health law connections and did a , a good job

3:09

of, of digging into these rules. And we'll

3:11

refer to that I think through during the podcast,

3:14

but I encourage you to find those resources

3:16

, uh, because they were excellent. Um,

3:18

and give a good background. We won't have time

3:21

to get into the weeds here too

3:23

much , um, and on this topic,

3:25

so I'd encourage you to take a look at those. Um,

3:28

thanks to Tony and and Jennifer

3:30

for participating. Before we get started , uh,

3:32

with some of the q and a , um, I'd

3:35

, I'd like it if you could introduce yourselves, maybe

3:37

starting with Tony and then Jennifer.

3:40

Sure. Thanks Joe. Um, for

3:43

the introduction and for participating

3:45

today. I appreciate it. Um, as

3:47

Joe said , um, I'm

3:49

a partner at McDermott. Um, I'm

3:52

based in New York, and , um,

3:54

I'm one of the co-leaders of our healthcare

3:57

regulatory and compliance practice. I mainly

4:00

have a fraud and abuse, you know, counseling

4:02

and government re uh , investigations

4:05

practice , um, you know, with different , um,

4:08

healthcare organizations sort of across the

4:10

industry. And prior to McDermott, I was at

4:13

the Inspector General's office for a number of years

4:15

, um, in the , uh, administrative

4:18

and Civil Remedies branch. And

4:22

I'll kick it over to Jennifer.

4:24

Thanks, Tony . And thanks, Joe. I

4:26

am Jennifer Michael. I'm a partner at

4:29

Bass Berry and Sims based in the

4:31

Washington D office. My

4:34

practice focuses on fraud and abuse

4:36

and regulatory compliance. Prior

4:39

to reentering private practice, I

4:41

also worked at H-H-S-O-I-G,

4:44

I was in the industry guidance branch. I

4:46

was there for almost nine years. And

4:49

the last two years there, I served

4:51

as chief of that branch. And

4:53

in that role, I oversaw the

4:55

drafting of the proposed rule for

4:57

value-based safe harbors. And

4:59

I currently spend a lot of my time thinking

5:02

about and working on value-based care arrangements.

5:06

Great. Uh , thanks , uh, Tony and Jennifer, and again

5:08

, I, I'm Joe Wolf. I share the ALA's

5:11

Fraud and Abuse Practice Group. Uh, uh,

5:13

I'm a shareholder at Whole Render . Um

5:16

, I lead its healthcare regulatory practice

5:18

group. Um, my day-to-Day client

5:20

work focuses on , uh, healthcare

5:23

provider and financial relationships , uh,

5:26

physician compensation, stark

5:28

and kickback work, and , and a and a lot of

5:30

work in this space of value-based care. Um,

5:33

I, I want to transition here a

5:36

bit to just give some background.

5:38

As I mentioned before , um, there's

5:40

a lot of content out there. Tony and and

5:43

Jennifer have , uh, spoken on this

5:45

recently. I I think even at the most recent , um,

5:48

a conference in New Orleans , new Orleans for HLA,

5:51

there was another session on value-based enterprises

5:53

and Care. I encourage you to look at that

5:55

, um, as as, but we're

5:58

gonna try to, I , I wanna start off just a

6:00

very high level discussion of , of

6:02

vbe. Um, the rules on,

6:04

on value-based enterprises came

6:06

out back in January of , of 2021.

6:10

Uh, they gave us some new exceptions and

6:12

safe harbors that focus on value-based

6:14

care, again, at a high level.

6:17

Um, as all of us that work in this space, you

6:20

know, appreciate healthcare organizations

6:22

receive reimbursement from federal healthcare

6:25

programs. And because they receive

6:27

that reimbursement , um, there's, they

6:29

need to comply with the fraud and abuse laws

6:31

to make sure that the care that

6:33

, um, is referred and that is submitted

6:36

for those claims , uh, is, is defensible.

6:38

Um, so healthcare organizations often perform

6:41

what I sometimes call the dual analysis,

6:44

you know , uh, your stark exception aligned

6:46

with your anti-kickback , uh, type safe

6:48

harbor or anti-kickback analysis. And

6:51

if you meet those for your , um,

6:54

your arrangements, then the

6:56

incentives should be okay for submitting those

6:58

claims. And , uh, historically,

7:01

our menu of exceptions focused

7:03

on a few , uh, key requirements.

7:06

And, you know, the terms and, and concepts. We

7:08

often think of fair market value, commercial reasonableness,

7:11

the prohibition on taking into account referrals,

7:14

having to have a signature and a writing and

7:16

set in advance. And all , all of those requirements are

7:18

what we saw , um, in our, our

7:20

normal exceptions. And

7:23

starting in January, 2021, we sort of had a

7:26

new menu of, of value-based

7:28

rules. And essentially, in

7:30

, in the government was saying that

7:33

if your financial incentives are tied

7:35

to value-based care, then

7:37

you have a new framework, a new

7:39

opportunity to , um,

7:42

to defend your ultimate , um, incentives

7:44

that you're paying out if you're aligned with these value-based

7:46

care concepts. So , um, that

7:49

mean meant back then that the government had

7:51

to create some, some new terminology.

7:54

And that's where , um, we

7:56

, we see this new framework, these

7:58

types of terms, things like , uh,

8:01

the value-based enterprise. What

8:03

is a value-based enterprise? What

8:05

are value-based , uh, purposes?

8:08

Uh, things like coordinating and managing

8:10

care, improving quality, reducing

8:13

costs , and transitioning from payment

8:15

and delivery to, from, from volume towards

8:18

value. Uh, that's where that

8:21

terminology was developed. Um,

8:23

value-based activities, taking an

8:25

action refraining from taking an action.

8:28

Um, and also the, the, the

8:30

concept of a target patient population. Uh

8:33

, because the government was developing this new

8:35

kind of framework , um, we needed

8:37

this, this new terminology , uh,

8:39

to , and , and I, I've seen this terminology sort of take

8:41

hold more over the last, last few years.

8:45

Um, and then beyond that, the government

8:47

created some exceptions

8:49

and safe harbors that are,

8:52

are driven by a concept of

8:55

risk . So if a healthcare organization , uh,

8:57

develops a care model , um,

9:00

or is servicing a target patient population

9:02

and is at full risk, it has , um,

9:05

uh, a, a, a new menu of , of, of

9:07

a , a new exception and safe harbor. Um,

9:10

if there is meaningful downside

9:12

risk to the physicians and other , uh,

9:15

exception is available , um,

9:17

if there is in kind or remu remuneration

9:20

for care coordination , um, there,

9:22

there could be a new safe harbor . So there , there really

9:25

is this kind of dual analysis now has

9:27

some new tools, and we're not gonna get

9:29

into those , uh, maybe Tony and Jennifer

9:31

will when they react, but , um, we

9:34

just have this new set of, of , um, arrangements

9:36

and safe harbors , uh, that, that

9:39

help illustrate , uh, the

9:41

government's thinking on, on these

9:43

new rules. And when you look back

9:45

at the, the government's , um,

9:48

uh, examples in the rural rollout, I, I continue

9:50

to go back to a really strong government

9:53

example , uh, where the

9:55

government talked about a hospital that

9:58

developed this new cancer screening

10:01

protocol. And the , the hospital

10:03

thought physicians were ordering

10:05

a, a dual modality or single modality

10:07

cancer screening, and that perhaps a dual modality

10:10

cancer screening , uh, may be

10:12

better. And it develops , uh, guidelines

10:15

and a, a , a value-based enterprise to

10:17

encourage physicians to order this

10:19

, uh, dual modality cancer screening

10:21

because it's better for patients. And in that

10:24

example , um, it, it

10:26

really jumped out at me that that's

10:28

just such a different way to think about , um,

10:31

uh, healthcare and , and how we structure arrangements.

10:34

And in , in that example, the value-based enterprise

10:37

was the hospital and the identified community

10:39

physicians, the target patient

10:41

population was patients in the hospital service

10:43

area that would receive the screening for the

10:45

particular disease . The value-based activity

10:48

that was being encouraged was adherence

10:50

with the hospital's revised care protocol

10:53

, um, and by ordering that

10:55

dual modality cancer screening, and then the

10:57

value-based purpose was to

10:59

, um, was to , um,

11:02

improve the quality of care for patients

11:04

in the hospital service area by detecting

11:06

more cancers and avoiding potentially

11:08

unnecessary overtreatment of false positive

11:10

results. So I , as a , as

11:13

a way of example, you know , that's a , a

11:15

a different way of thinking about this

11:17

kind of regulatory analysis. And I think

11:19

there's lots of opportunity in this space,

11:21

and that's why, you know, we have Tony and

11:24

Jennifer on today to talk about , um,

11:26

this opportunity and what they're seeing in the

11:28

market. So that's a bit of high level

11:30

background. Again, new exceptions

11:33

and safe harbors that help us to protect

11:35

incentives that are focused

11:37

on , um, some aspect of taking

11:40

on risk , but don't, not, don't

11:42

necessarily have to take on risk , um,

11:45

in using that new terminology. But now

11:47

I'm gonna transition. I want to talk to Tony and

11:49

Jennifer , um, about what they're

11:52

seeing in the industry. And I'll start off by

11:54

, uh, you know, posing a question to Jennifer.

11:56

You know, Jennifer, what trends are or opportunities

11:59

are you seeing , uh, in the value-based

12:01

care space in your practice?

12:05

So, I'm seeing as far as trends

12:07

, um, I'm seeing clients

12:10

focus on care gaps

12:13

and opportunities for care

12:15

improvements. So for example

12:17

, um, looking at gaps, those

12:20

could be geographical gaps such

12:23

as underserved rural communities

12:25

or , uh, socioeconomic

12:27

gaps such as dual eligible

12:30

beneficiaries who aren't accessing

12:33

the right type of care at the

12:35

right time. As

12:37

far as care improvements, I'm

12:39

seeing a focus on , um,

12:42

frequently on disease states. So, for example,

12:44

an entity that is really good at,

12:47

at driving patient engagement

12:49

, um, in diabetes,

12:52

in the diabetes space, or in the physical

12:54

therapy space. Um, as

12:56

well as a focus on a, a

12:59

stage of care, whether that be,

13:01

you know, post discharge from a hospital

13:03

, um, an entity that's really good at

13:05

that, you know, post 60 day discharge,

13:08

making sure patients are adhering to their

13:10

discharge plan of care , um,

13:13

or something like palliative care, which

13:15

is a stage , you know, making sure patients

13:18

are considering all of their options and

13:20

accessing palliative care when appropriate.

13:23

Um, so, so really it's, it's looking

13:26

for those , um, those

13:29

types of arrangements where the potential

13:31

ROI of, of improving

13:34

care is really compelling.

13:37

Um, as far as opportunities , um,

13:40

I'm seeing, you know, with the growth of continued

13:42

growth of managed care, I

13:45

think we're going to continue to see more

13:48

delegation of risk in the managed

13:50

care space. Um, oftentimes,

13:53

you know, entities can

13:55

rely on the managed care safe harbors, but

13:57

the , those don't always work for every arrangement.

14:00

And the value-based safe harbors

14:02

allow more flexibility with as

14:04

far as patient engagement. Um,

14:07

and the other big opportunity I'm

14:09

seeing is the growing relevance

14:12

of ai. Um , especially

14:14

for things like pattern recognition,

14:16

so much like how the government

14:19

uses data analytics to identify

14:21

outliers for purposes of enforcement

14:25

entities can use those same data analytics

14:27

to identify outliers for

14:29

purposes of either identifying

14:33

a , a target patient population

14:35

or identifying individuals within that target

14:37

patient population who perhaps

14:40

need , um, tools or, or

14:43

supports.

14:47

Thanks. Uh, thanks Jennifer. Appreciate

14:50

, uh, those thoughts. And Tony, a

14:52

similar question for you. What are you seeing , um,

14:55

with healthcare organization? How are they using

14:57

the value-based rules?

15:00

Yeah, I think in many ways it

15:02

, in many ways , um,

15:05

similar to some of the things that Jennifer

15:07

said, I think probably the most common

15:10

use is around patient

15:12

engagement and trying to address

15:14

social determinants of health, particularly

15:16

by an entity that has taken on

15:19

payer risk. Um, I

15:21

see a lot, you know, whether it's, you

15:24

know, the , an entity that a primary care

15:26

practice that is taken on risk or it's an a

15:29

CO that is, you know, that has

15:31

a number of members that could be a value-based

15:34

enterprise. All of those members

15:36

could be, you know, value-based participants.

15:39

And then looking at what are the care

15:41

gaps? Or, you know, now

15:44

that we're responsible for the

15:47

cost of care for this target patient population,

15:49

how can we, you know, help

15:52

those patients? You know, what

15:55

are , in some ways this is the low hanging fruit,

15:57

right? The , the easy fixes

16:00

towards getting people to, for,

16:03

to, to improve outcomes

16:05

and quality of care. Um,

16:08

could be as simple as making sure the

16:10

patient has transportation to their doctor's

16:12

appointments. Um, there's a transportation

16:15

safe harbor, obviously, but then there's, you

16:17

know, that you could also use value-based

16:19

safe harbors as well. Um, the

16:21

patient engagement safe harbor or,

16:24

you know, expanding beyond that to look

16:26

at, well, what else does the patient need?

16:28

Or what else could we provide the patient that

16:30

otherwise would potentially create

16:33

beneficiary inducement and

16:35

kickback concerns? But in the context

16:37

of the, of the value-based arrangement,

16:39

you, you have more flexibility. Um,

16:43

I think the second way is, is

16:45

related in terms of those then those

16:48

entities that are either partnered together

16:51

in NACO or sin or , um,

16:54

you know, different entities inside

16:56

a larger corporate family, figuring

16:58

out how to, or exploring how to share

17:01

resources amongst each other , um,

17:04

with the goal of still being to

17:06

better coordinate care amongst those

17:11

entities. Um, or, you

17:13

know, and , and , and in order, and for

17:15

that, there is, you know, the care coordination

17:17

safe harbor. Um, you

17:20

know, there is, you know, there that

17:22

has a 15% contribution

17:24

requirement that, you know, sometimes

17:27

creates some issues or, but

17:30

there, there's, you know, there there

17:32

is a pathway or that presents a

17:34

pathway in order for organizations to

17:36

share resources together in a way

17:38

that, you know, frankly,

17:42

you know, one might have been able to justify

17:44

prior to these rules, but now that

17:46

we have these safe harbors , um, you're

17:48

able to, you know, look to them as well. And

17:52

then the third thing I think would be around physician

17:54

compensation and sort of contract,

17:57

you know, the , uh, you

18:00

know, contract or relationships in general. Um,

18:03

one of the safe harbors that you

18:05

, you, which would put in this value-based

18:08

bucket is the personal services, the

18:10

, uh, the amendments to the personal services

18:12

safe harbor that include an outcomes-based

18:15

compensation. Um, you

18:17

know, that is something that I've looked to, to

18:20

create incentive or to work on

18:22

developing incentive compensation for

18:25

independent contractors. You know, you

18:27

still have , um, you

18:30

know, you still have FMB and other requirements

18:32

in that particular instance, but it

18:34

can be a helpful vehicle.

18:38

And how about you, Joe? What are you seeing have

18:41

, uh, value-based enterprises been used

18:43

as, as you expected?

18:46

Yeah, thanks, Jennifer. Um, you know, I,

18:48

I do think , uh, you know, I , as , as Tony

18:50

said, I'm seeing a couple of different components

18:53

, uh, to this. I , I say number one

18:55

I'm seeing is especially more

18:57

recently, more interest in

19:00

business leaders getting educated about

19:02

, uh, the , these value-based

19:04

opportunities. Again, these rules are

19:06

very different , uh, than what we

19:08

had seen historically. So more interested

19:11

in, in seeing how this fits into

19:13

, um, an overall , uh,

19:16

value-based strategy. I do think

19:18

value-based care sort of

19:20

lived in , um, in

19:22

, in maybe just the managed care setting

19:25

, um, before and , and

19:27

now as we've seen the development of population

19:29

health leaders and also

19:31

, um, uh, value-based

19:34

care leaders in , in organizations, and

19:36

actually now there are VPs of population health. Um,

19:40

they're , they're showing some interest in these tools

19:42

, um, these tools and

19:44

these new safe harbors , uh, because they , they

19:46

allow for , um, targeted

19:48

, uh, arrangements that

19:50

address an issue like I just mentioned

19:52

with that cancer screening example for the government,

19:55

if a healthcare organization is encountering

19:58

a specific problem that

20:01

, uh, is be being

20:03

driven by , um, issues

20:05

related to care coordination or,

20:07

or quality , um, or, or

20:10

costs to a payer, they , they could develop

20:12

, um, a, a , a targeted type

20:14

arrangement. So , um, I think

20:16

, uh, healthcare organizations are, are learning about

20:18

this, trying to see how they can

20:21

, uh, introduce it to their overall

20:23

, uh, care delivery , uh, platform.

20:26

Um, I've talked to a couple of clients

20:28

about developing VBE

20:31

committee structures that are

20:33

focused on finding opportunities like

20:36

this , um, much

20:38

like we might think a quality committee would

20:41

ha would carry that function before.

20:43

So it shows that there's interest , um,

20:45

regarding strategies. I think some organizations

20:47

are, are looking to these rules as

20:50

an additional layer of protection

20:52

for more traditional incentives. I think Tony

20:55

was, was alluding to that. Um, how

20:57

does this align with and allow you

20:59

to pay , pay physician compensation

21:01

perhaps , um, in a, in a different

21:03

way, a more , uh, creative way

21:05

focused on, on value-based , um,

21:08

situations. Uh, could it help mitigate

21:11

risk under arrangements that

21:13

have similar to features to what we have

21:15

seen for years, but now we've

21:17

introduced a , a value-based component and

21:19

some outcome measures , uh, into that model. Uh

21:22

, the others are really looking at this as

21:24

a , an , an opportunity again, to develop

21:27

something innovative , um, and,

21:29

and perhaps novel to address an

21:31

actual issue. Uh , I've

21:34

talked to clients and worked with clients

21:36

on programs focused on, for

21:38

example, a , a surgical program , um,

21:41

and where there is a need perhaps

21:44

for , um, in kind care

21:47

coordination along the

21:49

continuum of care through the surgical program

21:51

, uh, and how that

21:54

enhanced , uh, staffing could , uh,

21:57

be structured as a , a value-based

21:59

enterprise if the , um,

22:02

the physicians adhere to care protocols

22:04

, uh, perhaps conduct post

22:06

discharge meetings , um, achieve

22:09

those kind of quality and outcome measures. Um,

22:11

and as these rules are structured, there can

22:13

be a component of , uh, referring

22:17

within the target patient population

22:19

within the vbe e as well, in

22:21

order to, you know, make sure that you're

22:24

in a position to achieve those outcomes. There could be

22:26

opportunity there. Um,

22:28

I think as Jennifer and Tony were both saying there, there

22:30

could be an opportunity to focus on , um,

22:33

A-A-A-A-A-A part

22:35

of the population that , um,

22:39

requires additional treatment support.

22:42

Um, was talking to a client and , and working

22:44

with a client that had identified

22:46

, um, an at-risk patient population

22:49

, um, and developed a, a

22:51

unique patient-centered medical home by

22:54

partnering with a private practice

22:56

physician who had , uh, developed an innovative

22:58

care model , uh, covered some

23:01

of the costs related to that

23:03

, uh, patient-centered medical home. Uh,

23:06

then the independent physician operates

23:08

the medical home , uh, provides

23:10

proactive case management , um,

23:13

service linkage , um,

23:15

and support for that patient population

23:17

and works to achieve outcome measures. So

23:19

, um, I think there's, those

23:22

are just two examples that I'm, I'm seeing.

23:25

Uh, but another theme is

23:28

sort of how does this fit within the whole delivery

23:30

model? If you have an A CO and

23:32

a clinically integrated network , um,

23:35

in a physician enterprise, and

23:37

you , um, are trying to put

23:40

together your overall strategy, whether

23:42

that's , um, using the a CO

23:45

fraud and abuse waivers or the normal

23:47

stark and kickback exceptions, does this

23:49

fit within it , um, to somehow

23:52

better protect or, or provide

23:54

additional protection for the incentives

23:57

that you're trying to develop to drive value-based

23:59

care? Um, I'm seeing more discussion

24:01

about how does this fit into an enterprise , uh,

24:04

strategy as well. But I'd say most of the, the

24:07

traction has been around getting educated

24:09

and then also using targeted , uh,

24:11

opportunities to use these rules. So

24:15

thanks for the question. Uh, Jennifer , um,

24:18

I , I wanna maybe let's move on to a question

24:20

, uh, to Jennifer.

24:23

Uh, Jennifer, in your sessions with Tony, you went

24:25

through several hypotheticals of potential

24:28

vbs. As you kind of think back, is there a

24:30

, a hypo or an example you've

24:33

worked with through since , uh, since you

24:35

gave that session or that perhaps a

24:37

, a good illustration of, of the VBE

24:39

rules?

24:41

Yeah, so , uh, the Tony , uh,

24:44

alluded to one of them , um,

24:46

and that is a data exchange

24:49

among and between affiliated entities.

24:52

So looking at the care coordination safe

24:54

harbor , um, you know, I , a

24:56

client, a couple of clients actually have

24:59

, we're interested in, you

25:01

know, as you alluded to, Joe, those business

25:03

synergies that also can improve

25:05

patient care. So, for

25:07

example, a client that has a number of

25:11

kind of related, but not, not

25:13

directly related healthcare , ent uh

25:16

, healthcare entities , um, one

25:18

of them , like for example, if there's a , a

25:20

personal care services entity

25:23

is, is out there interacting with the patient

25:25

on a frequent basis, can really

25:28

keep tabs and monitor how the

25:30

patient's health is doing on a day-to-day or

25:32

week to week basis. And if they're

25:34

seeing that the patient is maybe,

25:37

like, for example, at the end of the month, the

25:39

health out , you know, the health is patient's

25:41

health is declining , um, maybe

25:43

they are, that's when their SNAP

25:46

benefits are running out, and so they're not getting

25:48

as good nutrition, well, they can make

25:51

a , um, a referral to an affiliated

25:53

entity that does meal delivery

25:55

systems. Um, so

25:57

it's that data exchange that can

26:00

be protected, that can

26:02

raise some potential HIPAA

26:04

challenges. But if that data

26:07

exchange is done at the direction

26:09

of a managed care plan, usually you can overcome

26:12

those challenges and the fact that they're

26:14

affiliated entities , uh, and

26:17

it's the exchange of data really makes the

26:19

15% contribution less

26:22

of an issue there. Um,

26:24

the other one we talked about during

26:26

our session , um, I I won't go

26:28

quite as in depth , um, that I think is

26:30

really interesting is, again,

26:32

it involves that delegation of risk

26:35

in the, in the MA space. And

26:37

in this case there was a subcapitation,

26:40

so a , a delegation of risk to

26:42

a risk bearing entity , um,

26:45

in a rural area. And in that,

26:47

that area, there were , um, people

26:49

who weren't getting the specialty

26:52

care that they needed. The providers

26:54

just weren't there. So there was a HOS one hospital

26:56

, um, you know, they have the standard

26:59

hospitalists, ER docs, primary care,

27:01

but they don't have those specialists

27:03

, um, needed to , uh,

27:06

adequately treat the patient . So the patients either went

27:08

without care or had to travel really

27:11

great distances. So this

27:13

entity entered into an arrangement, formed

27:15

A VBE with a hospital, that

27:18

hospital entered into agreements

27:20

with specialty physicians , um,

27:23

and just to set up a provider based

27:26

department in the hospital. And then

27:28

the , um, management

27:30

company, the risk bearing entity in the hospital

27:32

formed A VBE , um,

27:35

and then the hospital for the,

27:38

it , it would bill for the items and services

27:42

provided by these specialty physicians and

27:44

attribute its revenues to the

27:47

VBE, which then the

27:49

VBE could pay the hospital based

27:51

on the, you know, the contractually agreed upon

27:53

amounts and the management

27:56

company could retain some

27:58

as well. So I thought that was

28:00

a really interesting way

28:03

of addressing what is, you know, it

28:05

was, it was critical to the community

28:07

and, and it really improved

28:10

patient care. So the , the VBE

28:12

participants, in that case where the management

28:14

company or the risk-bearing entity in

28:16

the hospital, the value-based

28:19

purpose was to improve the

28:21

care of these, of

28:23

these rural population, in

28:25

particular , um, rural, rural

28:29

residents who required , um, certain specialty

28:32

services and the value-based activities

28:35

were having these services be

28:37

provided by the physicians , um,

28:39

often via telehealth services.

28:44

Great . Thanks, Jennifer. Appreciate all those, those

28:47

examples. Uh , Tony, how about you? Do

28:49

any of those example models stick

28:51

out as as particularly helpful? Uh

28:54

, have you developed other examples over

28:56

the last couple of years you'd , you'd be willing to share?

29:00

Yeah, I think the compensation

29:03

one, I mean, you know, sort of

29:05

looking back on 2023 too

29:07

, I mean, we, I think saw several

29:09

stark law related FCA

29:11

settlements with health systems related

29:14

to their employed physician compensation.

29:18

Um, you know, some pretty large one,

29:20

the particularly large one as well towards

29:23

the end of the year. And it struck

29:25

me that, you know, putting aside

29:27

whether that there are other aspects

29:30

of the sprint rules, particularly

29:32

on the CMS side, that addressed or

29:35

probably would have addressed some of those issues. But

29:38

there is a , it sort of highlighted

29:40

for me again, that it is helpful or

29:43

the value-based stark exceptions

29:46

do provide another avenue to,

29:50

for employed physician compensation.

29:52

Because of course, on the anti kickback side, you have

29:54

a very broad employment safe harbor. And

29:57

so you don't typically worry very much about

29:59

the kickback statute when you're talking about your employed

30:02

doctors. But on the Stark side,

30:04

traditionally, you still have fair market

30:07

value, volume and value requirements.

30:10

And one of the things that we sort

30:12

of talk that we talked about in the Connections article and

30:14

is, you know, how do you, how

30:16

could you use the stark

30:19

exceptions to create, you

30:22

know, to have a certain level of incentive

30:24

compensation for your employee doctors

30:27

in the way that you may not have been able to do before,

30:29

such as setting up, you know , uh, uh,

30:32

now you have to sort of build the infrastructure

30:36

in the beginning. Um, you have to have

30:39

articulated what the value-based purpose

30:41

is, what sort of criteria,

30:44

right? What you want the physicians to

30:46

do in order to be eligible

30:48

for that incentive bonus. Um, but

30:51

CMS did, you know, say that employers

30:53

could use these exceptions. And if you

30:56

could follow, you know, if

30:58

you want your physicians to implement

31:00

certain care guidelines that are well established

31:02

or , um, improve, you

31:05

know, outcomes, you could potentially

31:07

create, you know, an incentive pool

31:09

that is based, you know, that is potentially

31:11

based on in a way that

31:14

might, you know, under the old rules

31:17

at least, potentially indirectly vary

31:19

with volume or value of referrals. But

31:21

under these, under the new rules, you,

31:24

you know, you, you, you have more

31:26

flexibility in looking to the value-based

31:29

exception for that type

31:31

of compensation. Um, there's

31:35

somewhat of a belt and suspenders thing too is you

31:37

might want to try to rely on the employment safe

31:39

harbor or the employment exception

31:41

for, you know, your traditional

31:44

compensation, but then rely

31:46

on the , uh, value-based

31:48

exception for incentive compensation.

31:51

There's nothing to say. You can't necessarily,

31:53

you know, look to multiple exceptions.

31:57

Um, you know, and that is one thing

32:00

I have seen. I mean, organ hospitals

32:02

are not necessarily, you know, flush

32:04

with cash today. And so there's

32:07

is not necessarily , but

32:09

, uh, the , you know, so that is an

32:11

issue in terms of, there's still obviously,

32:14

you know, concerns of, from

32:16

a business perspective about how much you

32:18

know about physician compensation levels.

32:21

But I think there is, you know, there's, there's

32:24

is, you know , both sides of this

32:26

conversation have goals, and

32:28

one of them is improving the care outcomes

32:31

and, and particularly, you

32:33

know, addressing readmission rates and other

32:36

ways in order to have the

32:38

care improvements instituted at the

32:40

hospital. And compensation can

32:42

be a tool to help achieve that.

32:47

How about you, Joe? Do you have any examples

32:49

from presentations or from your client

32:51

work that might help the audience?

32:54

Yeah , Tony and , and , and Jennifer, those . Tony,

32:57

I really appreciate those examples. Um,

33:00

you know, one , one thing just

33:03

kind of as I react here , um,

33:06

the , when the government talked about , um,

33:09

these, the design of these value-based

33:12

arrangements , uh,

33:14

there was some language that stuck out to

33:16

me that the, that

33:19

the arrangement has to be reasonably designed

33:21

to achieve a value-based purpose. And

33:23

so that means as , as I read the

33:26

commentary there, that there's , uh,

33:28

lots of opportunities to be , uh,

33:31

creative. Um, and , and the

33:33

examples what I thought the government did a

33:35

really good job in, in both on

33:37

the stark , the CMS side and the OIG

33:40

side here of, they gave lots and

33:42

lots of examples , um, in

33:44

the commentary. And , um,

33:46

I found clients are, are very receptive

33:48

once they hear that the government actually, you

33:51

know, had talked about and, and gave , uh,

33:53

some examples. So there's some really good examples

33:56

, uh, from the commentary I mentioned that cancer

33:58

screening , uh, example earlier

34:00

, um, if you work your

34:02

way through the commentary, there's

34:04

talk about , uh, shared savings

34:07

and gain sharing and pay for performance

34:09

, uh, types of incentives , uh,

34:11

being on the table , um, incentives

34:14

to refrain from ordering unnecessary

34:16

care. Um , I mentioned that

34:18

, uh, dual modality cancer screening

34:20

example. In , in that example, the government said

34:22

you could pay , uh, they , uh, indicated

34:25

that that incentive was set up, so

34:27

it was $10 for each dual modality cancer

34:30

screening ordered. Um, there

34:32

was talk about patient assessments, you know, paying

34:35

for the completion of, of patient

34:37

assessments , um, uh,

34:40

compensating or providing incentives for

34:42

physicians that participate in post-discharge

34:44

meetings and follow-up services , uh,

34:47

care transition types of incentives

34:49

, um, sharing of certain

34:51

kinds of internal cost savings. Uh,

34:53

there was just lots and lots of examples

34:56

getting into patient engagement as well. Um,

34:59

one that stuck out to me was the

35:01

government talking about a

35:04

hospital providing a physician

35:06

group with care managers that

35:09

were tasked with identifying the

35:11

physician group's high risk patients to

35:13

help the , the, and , and the care

35:15

managers would help the patient's care

35:18

transitions and, and medication

35:20

and home-based care and , and keep tabs on

35:22

that to make sure that the patients receive

35:24

the appropriate follow through and

35:27

post discharge care. Uh , and

35:29

that also would include some data analytics systems

35:31

to help the group's physicians , uh,

35:34

make sure their patients are achieving better healthcare

35:37

outcomes. And then also some discussion of remote

35:39

monitoring technology to alert

35:41

the group's physicians when the patient needed

35:44

a healthcare intervention. And,

35:46

you know, thi this does get me thinking that,

35:48

you know, this can be a solution to this

35:50

continuum of care , uh, issue

35:53

that a healthcare organizations can

35:56

be a bit more creative as

35:58

they think about how patients come down

36:00

the, the care pipeline to make sure

36:02

that those , uh, there , there isn't like a

36:05

drop off of , uh, and , and actually

36:07

sort of slower follow up care

36:09

than is as necessary. Um,

36:12

I , I've been talking and working

36:14

with the clients , um, around

36:16

a situation like this where we had one

36:19

kind of provider that is seeing the

36:21

patients earlier on in the care, but at, at

36:23

some point in, in the normal care continuum,

36:26

there is a handoff or a transition to a

36:28

second type of provider. And

36:31

, uh, the , the specific situation

36:33

we were dealing with is one where the , the

36:35

second provider , um, the

36:37

, the patients weren't getting scheduled , uh,

36:40

perhaps as quickly as they should have . And,

36:42

and then also outcomes and, and , uh,

36:44

patient experience was, was negatively

36:47

impacted. And so in that situation, we , um,

36:50

looked at A-A-V-B-E type model

36:52

where , um, the, the, the

36:55

healthcare organization would oversee

36:57

the VBE and then develop

36:59

some team-based metrics between

37:02

these two categories of providers,

37:04

and then perhaps develop and

37:07

roll out care coordinators to make sure that

37:09

this patient dropage didn't occur. And

37:12

then , um, also developed some targeted

37:15

incentives, a bonus type

37:17

incentive , uh, focused on

37:19

this care coordination and quality, maybe including

37:21

, um, uh, metrics around how

37:24

quickly that follow-up care happened. And

37:26

then in turn, the physicians would , um,

37:29

uh, be tasked with coordinating that care,

37:32

participating in a work group , uh,

37:35

along with those care navigators to better

37:37

get their hands around this coordination of

37:40

care. Um, and then also

37:42

there could be, I think a , another layer

37:44

where there is , uh, uh, a

37:47

referral concept that ensure that these

37:49

patients stay within the care pipeline to get these

37:51

, uh, targeted outcome measures over

37:54

time. So I think, again, this, this

37:56

kind of illustrates the government's given us

37:58

a lot of examples, and then we could look to some

38:00

of those examples and expand upon them , uh,

38:02

perhaps to develop really innovative , uh,

38:04

care models as well. So

38:07

, um, a couple of

38:09

examples there. Um, I

38:11

wanted to , uh, may jump to

38:13

discussion of the value-based

38:16

enterprise rules and how they

38:18

interact with some other common , uh, concepts.

38:21

And I , I think I'll turn this question to Jennifer.

38:24

Uh, the Vbe rules themselves don't

38:26

have a fair market value , um, or

38:28

volume or value type standard. We alluded

38:30

to that before. Um, and some

38:33

don't have a commercial reasonableness component

38:35

. And , and from your vantage point, why

38:37

is that meaningful? Uh , maybe even

38:39

from a practical standpoint?

38:42

Yeah, I think it's, it's meaningful

38:44

because particularly if you are asking

38:47

people to take on risk as, as

38:49

they're required to do in the substantial downside

38:51

financial risk in full financial risks

38:54

, safe harbors, you have to give

38:56

them a reason to , um,

38:58

to take on that risk. And if , if

39:00

you're capping payment at fair market

39:03

value, that's just not gonna be

39:05

enough, I don't think. Um,

39:08

so, and, and you know, if, if

39:10

the value based arrangement

39:12

is particularly effective

39:15

and really good, it's possible

39:17

that you could have a significant

39:20

, um, improvement in outcomes

39:22

that could result in a significant

39:25

savings amount to be distributed

39:27

to VBE participants.

39:30

And so you want to be

39:32

able to, to offer , um,

39:35

people that that's the

39:37

hook, right? That there's the incentive to,

39:39

to change your care protocols to

39:42

take on that risk and to if,

39:44

and if you believe in what the value-based

39:47

activities are, that they really are

39:49

going to improve patient care. Um,

39:52

that's how you get them to participate.

39:54

And the , you know, the value , the volume and

39:57

value that's, that's really necessary

39:59

because you have the defined

40:01

participants in, in the VBE,

40:03

and they're going to be referring

40:05

to each other , um, and participating

40:08

in these same care protocols.

40:10

So , um, you , you know, you can compare

40:13

that to the outcomes-based

40:15

payment arrangements in the personal

40:17

services safe harbor where there is a fair

40:19

market value requirement, but that

40:21

payment is only made if the

40:24

outcome is achieved. So you

40:26

can look to either one

40:28

, um, but that, you know, getting

40:32

rid of that fair market value cap

40:34

is what is what the hook, I

40:36

think, to, to convince , um,

40:38

potentially reluctant , um,

40:41

physicians and other practitioners

40:43

and entities to sign up

40:45

to, to take on that , that risk.

40:48

Thanks, Jennifer. Um, Tony, what are your

40:50

thoughts on those requirements?

40:53

Um, and also maybe while you're answering

40:55

if, could you provide some, you

40:57

know, thoughts on the, the impact

41:00

of the narrowness of the value-based enterprise

41:02

safe harbors on the kickback side , um,

41:05

and what that may mean?

41:08

Yeah, I think that, you know, it , it

41:10

sort of highlights, I mean, I think first

41:13

of all , as an initial thought, it's

41:15

helpful, particularly on this

41:18

dark side, to not have those

41:20

big three, you know, present

41:23

all of the time. Um, you

41:25

know , because that is where there can be a lot of,

41:28

you know, those where there can be a lot of issues even

41:30

with the change . I mean, I think the change in

41:32

the volume value, the stark volume

41:35

value standard was very

41:37

significant in the sprint rule

41:39

and was , and addressed

41:41

a lot of the ambiguity around that

41:43

standard. But it still is, you

41:46

know, you still have fair market value questions

41:48

and some of the enforcement actions

41:50

we see, you know, continue

41:53

to focus on fair market value. And so

41:55

that is helpful to be eliminated.

41:58

But some of those are still present in the

42:00

kickback safe harbors, right? The, even

42:03

the care coordination, the

42:05

safe harbor, you have to determine

42:08

the fair market value of the inkind

42:10

remuneration that you're exchanging in

42:13

order to calculate the 15%

42:16

contribution, because that has to be either

42:18

15% of the offer's cost

42:21

or fair market value of

42:24

the inkind remuneration. So,

42:26

and in the personal services Safe harbor,

42:29

you still have , um, you

42:31

know, FMV and uh , requirements.

42:34

So I think what it does, you

42:36

know, more sort of broadly is highlight

42:38

, um, or

42:41

repeat the , the place

42:43

that we practitioners have been in

42:46

and clients have been in with Stark

42:48

and the United Kickback statute, which

42:50

is, you know, the safe harbors are typically

42:53

narrowly drawn. Um, many

42:55

arrangements don't fit within a

42:57

safe harbor, all of the elements.

43:00

Um, I mean, fair market value is certainly

43:02

usually an important element in a,

43:05

in effects and circumstances analysis

43:08

as well. Um, but you definitely,

43:10

you know, the , the safe harbors themselves

43:12

are more narrowly drawn than the stark exceptions

43:15

because you have to meet a

43:17

stark exception in order to

43:19

have a legal arrangement.

43:22

So, you know, we, you

43:24

know, this, the value-based

43:26

exceptions in safe harbor sort of continue

43:29

that construct of the exceptions

43:31

are easier to meet, you know, particularly

43:33

in the value-based exceptions are easier to

43:36

meet now because CMS removed some

43:38

of these, you know, these el

43:41

these elements, which are

43:43

, you know, do create sometimes obstacles

43:46

to compliance. But on the flip

43:48

side, your , your safe

43:50

harbors are more narrowly drawn. And so you may

43:52

be looking at effects and circumstances analysis

43:55

on the kickback side, which again, is not uncommon.

43:59

And I think, you know, fair market

44:01

value in particular, I think continues

44:03

to play a role in that firm , in

44:05

that facts and circumstances analysis.

44:08

Um, and so, you know, while on

44:10

some level there was relief there , you know, as

44:13

a practical matter, I still think, you know, that continues

44:15

to be a relevant , um, data

44:20

point in , in an overall arrangement

44:22

compliance analysis, risk profile.

44:27

Thanks, Tony. Um, I

44:29

think we're gonna get ready here to wrap up. Um,

44:32

Jennifer, let's start with you. Do you have any final

44:34

departing thoughts for our audience?

44:37

Um, I would just add to what Tony

44:39

said that yes, the, the value-based

44:42

safe harbors, the anti-kickback

44:45

statute are narrow. And so

44:47

there is some continued tension between,

44:49

you know , innovation and

44:52

the fraud and abuse laws, which are

44:54

designed to protect federal healthcare

44:56

programs and, and, and bene

44:59

or protect beneficiaries and

45:01

the federal Fisk. Um, I'm

45:03

, I'm still seeing so much room for,

45:06

for ai. Um, and so, you

45:09

know, think about having, these

45:11

are another tool in your arsenal, and

45:14

as you think about ai , um,

45:16

think about how it can be integrated into

45:19

a value-based arrangement at the same time.

45:22

Um, you know, I , I'm seeing more

45:24

and more , um, more

45:27

bills and more FAQs every day.

45:30

In January, Georgia proposed

45:32

a bill to restrict the use of AI

45:35

in healthcare, and just earlier this

45:37

month, CMS issued a FAQ

45:39

about the use of ai , um,

45:42

with respect to MA organizations. So

45:45

, um, keep your finger on

45:47

the pulse.

45:49

Thanks. Uh , Tony, any thoughts from you?

45:53

I think that there still is, I

45:55

think there still is room for innovation,

45:58

you know, in , in , in this value-based

46:01

construct. I think in particular, you know, there's,

46:04

what is really an interesting area

46:06

to explore that we are

46:08

all exploring <laugh> is

46:11

given the change in the marketplace, right?

46:14

I mean, now we have over 50%

46:16

of Medicare beneficiaries on a

46:18

Medicare advantage plan. You

46:21

know, fee for service is gonna be around

46:23

for quite some time still in

46:25

my view, but it is on

46:28

the waning end of its life

46:30

cycle . You know, the programs are moving

46:33

towards a risk-based pro

46:35

, uh, program structure. Um,

46:38

and providers are following suit because

46:41

they're gonna need to. And that's where there

46:44

is a , you know, where providers

46:46

are taking on financial risk

46:49

for patients. You know, the

46:51

, this value-based construct is , becomes

46:53

even more important because it, it

46:55

, it then provides

46:58

a roadmap for how are you going to address

47:00

the fact that you are now managing the,

47:03

you've now taken on the risk of

47:06

the cost of care and,

47:09

you know, you need to find partners,

47:14

and those partners are sometimes your own employees,

47:17

but you also need to find partners outside

47:20

of your organization in

47:22

order to manage the cost of care,

47:24

you know, and improve outcomes for

47:26

that patient population. So I

47:29

think, you know, this is where the, this

47:31

is where the, the marketplace

47:33

is heading. Um, and

47:35

I think there's, you know, there's

47:37

still a lot of opportunity , um,

47:40

to use these org . These , uh,

47:43

uh, I would also think that

47:46

would be, it would start to be

47:48

interesting to see , uh,

47:51

advisory opinions from OIG on

47:53

value-based arrangements that don't meet

47:56

one of the safe harbors. Um,

47:58

we haven't really seen that too much

48:00

yet, in part because, you

48:02

know, I think the, that the industry

48:04

is sort of percolating these ideas.

48:08

Um, and I think that is another avenue for

48:10

OIG to provide some guidance to the

48:13

industry about how do you really do facts

48:15

and circumstances analysis with

48:17

the value-based safe harbors when you're not, you

48:20

know, when you're not squarely within them.

48:24

Thanks for those , uh, thoughts. And I, I,

48:26

I echo what both of you are, are

48:28

saying, and I would only add like a , another final

48:31

thought is that , um, I,

48:33

I do think in, in seeing

48:35

clients adopt these rules

48:38

, um, the ones that I have

48:40

seen be arguably more, most

48:42

successful in , in going down that

48:45

road have , have started with

48:47

these, the , the concepts of, of

48:49

value-based activities and purposes

48:52

at the forefront, and have

48:54

been successful at getting those concepts

48:57

in front of not just legal and compliance,

48:59

but those involved in, in business

49:02

strategy and closer to the clinical

49:04

, uh, solutions.

49:07

Um, and I think that's because the

49:09

, these new exceptions rely on this

49:11

idea of being reasonably designed to achieve

49:13

a value-based purpose, and leaving

49:16

that as a legal compliance strategy , um,

49:19

sets it up where a situation where it just might

49:21

be reactive. Um, instead having

49:24

it in, in front of the , those

49:26

that are actually developing clinical

49:28

strategy and are trying to drive

49:30

care coordination and, and trying to

49:33

improve quality and that's their, their, their

49:35

function within the organization makes it , um,

49:38

much more likely that if tested that

49:40

you're gonna be in a position to show

49:42

that you had a value-based purpose. Um,

49:45

it's easier to show you had a value-based purpose if

49:47

, um, those that were designing the

49:49

strategy knew what, how these rules worked

49:52

at some level, and that all the steps along

49:54

the way were following , um,

49:57

the , these guidelines of, of trying

49:59

to create activities and having that kind

50:01

of purpose. I think that's gonna make

50:03

a much better record down the road if one

50:05

of these arrangements is challenged. So , um,

50:08

so I really appreciate your time.

50:10

Thank you to , uh, Tony and, and

50:13

Jennifer for tackling value-based care , uh,

50:15

today. Um, to all

50:18

of you listening in, thanks for your time as

50:20

well. Um, and, and watch for

50:22

future podcasts. Um , in our next podcast,

50:25

we're going to be , uh, talking

50:27

to , uh, Charles Oppenheim about

50:30

the Stark Law , um, a

50:33

supplement to the, his Stark Law , American

50:35

Health Law Association , uh, uh,

50:38

guide. And I'm looking forward to

50:40

that discussion. Uh, if you're looking to get more

50:42

involved in the practice group, reach out , uh,

50:45

to , uh, me or to one of our vice

50:47

chairs . Uh, we'd be happy to get you , um,

50:50

involved in a future podcast or

50:52

webinar. We're always looking for , uh,

50:54

new voices , uh, on this platform. So

50:57

, uh, Tony and Jennifer, thanks for your time

50:59

, uh, and have a great day.

51:08

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51:11

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51:13

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51:15

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51:17

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51:20

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51:22

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