Hidden in Plain Sight: Lesser-Known Exceptions Recently Adopted by Congress to the Federal Physician Self-Referral Law and Anti-Kickback Statute

At the end of 2022, Congress enacted the Consolidated Appropriations Act of 2023 (“CAA”),[1] for which there has been much fanfare.  

As it relates to health care, this legislation included provisions addressing issues such as partially relieving the physician payment cuts, waiving the statutory 4 percent Medicare sequester for two years, extending telehealth flexibilities through 2024, and making a number of reforms to the Food and Drug Administration. However, a set of provisions that have not received much, if any, attention concern the fact that Congress (i) adopted a new exception to the federal physician self-referral law (commonly referred to as the “Stark Law”) and a new statutory exception to the federal health care program anti-kickback statute (the “Anti-Kickback Statute”) and (ii) required the U.S. Department of Health and Human Services (“DHHS”) to consider whether (and under what circumstances) to adopt a safe harbor under the Anti-Kickback Statute.  

The subject of these provisions surrounds the issue of mental health. The statutory exceptions are related to “physician wellness programs,” defined as mental and behavioral health programs offered to a physician that have a primary goal of preventing suicide, improving mental health and resiliency, and providing training on strategies to promote better mental health (“PW Programs”). In addition, Congress has adopted a requirement that DHHS consider whether a new safe harbor should be adopted for contingency management interventions.[2]  

Statutory Exceptions for PW Programs

The Stark Law prohibits a physician (and is limited to only physicians) from referring a patient to a health care entity for the provision of designated “health services” (defined to include a host of items and services, such as, among other things, durable medical equipment (“DME”), laboratory services, and inpatient and outpatient hospital services) if the physician has a financial relationship with the entity and the financial relationship does not qualify for an exception.[3] The term “financial relationship” is defined broadly to include both direct and indirect ownership arrangements as well as direct and indirect compensation arrangements. The various Stark Law exceptions fall into one of three possible categories: (i) exceptions applicable to any and all types of financial relationships, (ii) exceptions applicable to only ownership arrangements, and (iii) exceptions applicable to compensation arrangements.  

It is the third category of exceptions (i.e., compensation arrangements) with which Congress has set forth a new exception for PW Programs that are offered by certain health care entities that have a formal medical staff: a hospital, an ambulatory surgery center, a community health center, a rural emergency hospital, a rural health clinic, a skilled nursing facility, or another similar type of entity as designated by the Centers for Medicare & Medicaid Services (“CMS”), the agency responsible for interpreting and enforcing the Stark Law. As such, a PW Program offered by a home health agency, pharmacy, or DME supplier would not be protected under this exception.

In order to satisfy the requirements of the new exception, the PW Program must:

• consist of counseling, mental health services, a suicide prevention program, and a substance abuse disorder program;
• be for the primary purpose of preventing suicide, improving mental health and resiliency, or providing training in appropriate strategies to promote the mental health and resiliency of such physician;
• be set out in a written policy approved by the governing body of the entity providing this program that includes:

• offered to all physicians in the geographic area, including physicians who hold bona fide appointments to the medical staff or otherwise have clinical privileges without regard to the volume or value of referrals or other business generated by a physician for such entity; and
• be evidence-based and conducted by a qualified practitioner.[4]

There is no timeline prescribed by Congress for when CMS must publish regulations further interpreting and refining this exception for PW Programs. However, given the extended time frame that it generally has taken CMS to promulgate regulations under the Stark Law, one should not be surprised if it takes a few years before any regulations are issued.

While the Stark Law is limited to only physicians, the Anti-Kickback Statute is much broader and applies not only to other health care professionals/clinicians but also to non-clinicians who are in a position to refer or generate business for a health care entity. Therefore, in order to provide both physicians and other health professionals with the same type of PW Programs, Congress adopted a statutory exception to the Anti-Kickback Statute that substantially parallels the Stark Law exception (i.e., it has all the same requirements) except that it is broader and applies to all clinicians.[5] 

Potential Safe Harbor for Contingency Management Interventions

“Contingency management” refers to a type of behavioral therapy in which individuals are ‘reinforced,’ or rewarded, for evidence of positive behavioral change. These interventions have been more widely used in the context of substance abuse treatment and often involve the provision of monetary-based reinforcers (i.e., vouchers or gift cards for retail goods and services) in exchange for the submission of drug-negative urine specimens.

As part of the CAA, Congress set forth that within a year of the statute’s enactment, the DHHS Office of Inspector General (“OIG”) is to conduct a review of whether to establish a safe harbor for evidence-based contingency management interventions and the parameters for the safe harbor.[6] As with other potential safe harbors, the OIG is to consider whether the arrangement may result in the following:

1. An increase or decrease in access to health care services.
2. An increase or decrease in the quality of health care services.
3. An increase or decrease in patient freedom of choice among health care providers.
4. An increase or decrease in competition among health care providers.
5. An increase or decrease in the ability of health care facilities to provide services in medically underserved areas or to medically underserved populations.
6. An increase or decrease in the cost to federal health care programs.
7. An increase or decrease in the potential overutilization of health care services.
8. The existence or nonexistence of any potential financial benefit to a health care professional or provider, which may vary based on their decisions of (i) whether to order a health care item or service, or (ii) whether to arrange for a referral of health care items or services to a particular practitioner or provider.
9. Any other factors the Secretary of DHHS deems appropriate in the interest of preventing fraud and abuse in federal health care programs.[7]

The CAA also requires that, within two years of the enactment of the statute, the OIG submit to Congress “recommendations . . . for improving access to evidenced-based contingency management interventions while ensuring quality of care, ensuring fidelity to evidence-based practices, and including strong program integrity safeguards . . . .”

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This Insight was authored by David E. Matyas. For additional information about the issues discussed in this Insight, or if you have any questions about the exceptions or Anti-Kickback Safe Harbor provisions, please contact the author or the Epstein Becker Green Health Care and Life Sciences attorney who regularly handles your legal matters.

ENDNOTES

[1] Consolidated Appropriations Act, 2023, H.R.2617, 117th Cong. (2022), available at https://www.congress.gov/bill/117th-congress/house-bill/2617.

[2] See H.R. 2617 at 3756-3763; Sections 4126 and 4127.

[3] See 42 U.S.C. §1395nn.

[4] See 42 U.S.C. §1395nn(e)(f).  

[5] See 42 USC §1320a-7b(b)(3)(L).  

[6] See 42 USC 1320a-7(d)(a)(3).  

[7] See 42 USC 1320a-7(d)(a)(2).