Multiple Health Organizations Tell Congress Fraud and Abuse Laws Must Be Modernized to Enable Value-Based Care Progress

In Letter to Lawmakers, Groups Say Outdated Legal Framework is Hampering Innovative Approaches to Deliver More Efficient, Coordinated Care 

WASHINGTON – More than 15 major healthcare organizations have sent a letter to Congress calling for changes to federal fraud and abuse laws that they say are acting as impediments to the health system’s transition from fee-for-service care to value-based delivery and payment models.

Specifically, the organizations are asking for modernization of the Federal Anti-Kickback Statute, the Physician Self-Referral (Stark) Law, and the Civil Monetary Penalties Law – laws that were created in a fee-for-service environment and were intended to prevent overutilization of healthcare resources and inappropriate influencing of healthcare provider decision-making, but are now preventing value-based collaborations that can benefit patients and contain health costs.

For example, the letter says, “compensating physicians with savings generated from care plan coordination among clinical and non-clinical partners as well as new contracting approaches that allocate risk based on outcomes may trigger scrutiny” under current laws.  “Improvements to the current (legal) framework are needed to make it more compatible with healthcare delivery and payment system transformation while still retaining appropriate protections against fraud and abuse,” they wrote.

The letter points out that, while safe harbors and exceptions to the Anti-Kickback Statute and Stark Law exist, they are too narrow in scope and broader reforms are necessary.

“Improving these statutes and regulations in a thoughtful way will help to improve patient outcomes through the delivery of more cost-efficient, higher quality care,” the groups wrote.  “We urge Congress to change and modernize these laws to enable healthcare stakeholders to effectively engage in value-based arrangements, to improve the quality and efficiency of care for patients and their families, and to allow for more comprehensive and efficient solutions.”

In addition to the Healthcare Leadership Council, organizations signing the letter include the Academy of Managed Care Pharmacy, AdvaMed, American Association of Neurological Surgeons, American Alliance of Orthopaedic Executives, American Association of Orthopaedic Surgeons, American College of Radiology, America’s Physician Groups, California Life Sciences Association, Congress of Neurological Surgeons, Federation of American Hospitals, Health Management Academy, Healthcare Transformation Task Force, Medical Alley Association, Medical Group Management Association, PhRMA, and Third Way.