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Malka Berro

Policy Associate

HHS Proposes Updates to Fraud and Abuse Laws

October 24, 2019 | Medicaid | Medicare | Comments
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Earlier this month, the Department of Health and Human Services (HHS) released a pair of proposed rules aimed at modernizing and clarifying the Stark Law and the Anti-Kickback Statute (AKS), two health care fraud and abuse laws. These new proposed rules aim to ease provider compliance burden and improve certainty for providers in value-based arrangements and for those who provide coordinated care. The rules also provide protections for providers transferring electronic health records and coordinating local transportation.


  • The physician self-referral law, or the Stark Law, prohibits providers from referring Medicaid/Medicare beneficiaries to another provider with whom they have a financial relationship.
  • The Anti-Kickback Statute prohibits payment in exchange for patient referrals payable through a federal program (i.e. paying for an expensive hotel stay in exchange for referral to Medicare/Medicaid services).

These laws are designed to protect patients from overutilization, unfair competition, increased costs, and potential corruption of medical decision-making. The recently proposed changes come after two Requests for Information (RFIs) and Congressional hearings on the laws, both of which revealed a need for further clarification for providers as well as a need to remove unnecessary burdens in the laws, such as parts of the AKS that block providers from helping patients with transportation.


The proposed rule to update the Stark Law opens additional avenues for providers to coordinate patient care and will allow providers across different health care settings to work together to promote quality care. New value-based care exceptions in the Stark Law acknowledge the evolution of the healthcare system and recognize that incentives are different for value-based care.

The proposal for the AKS would create a number of new “safe harbor” protections, various practices that are not treated as offenses under the statute even though they may be potentially implicating. The new protections include more flexibility for providers engaged in value-based arrangements – ranging from in-kind payment for coordinated care to payment for providers with full financial risk in a value-based arrangement. The rule would also create safe harbor for electronic health record (EHR) transfers between health care providers and expand the local transportation safe harbor to more mileage for rural areas and to transportation for discharged patients.

HHS also noted that, while new exemptions are in place, the proposed rules still include the proper safeguards to ensure protection against fraud and abuse. Public comments for the proposed rule are open through December 31, 2019. For more information on how to submit your comments, click here for the Stark Law and click here for the AKS.