This is the third in a five-part series discussing the new Value-Based Regulations adopted last year by the Centers for Medicare & Medicaid Services and the Office of Inspector General. Click here for a full list of related posts. 

The Stark Value-Based Arrangement exception protects compensation relationships in a value-based arrangement that is pursuing a value-based purpose.   This exception allows the parties to create a value-based arrangement where no risk is assumed by the participants. It is the simplest model to implement and allows the parties to begin the process of learning how to execute value-based arrangements and to migrate towards partial risk and full risk models.

The Value-Based Arrangement exception includes a safeguard in that the parties must monitor the arrangement to ensure it is serving the intended value-based purpose. If the monitoring indicates that the arrangement is not furthering that purpose, then the parties must terminate or revise the arrangement within prescribed time periods. If an ineffective arrangement is properly terminated, the arrangement will not be deemed to be non-compliant with the Stark exception during the time it was in existence.

This ability to exit an ineffective value-based activity without creating a Stark violation now allows the parties, through trial and error, a pathway to experiment with new value-based activities without the fear that a failed strategy will create a Stark Law violation.

Importantly, the new exception does not include the traditional Stark Law requirements that compensation must be set at fair market value, or that they must not take into account the volume or value of a physician’s referrals or the other business generated by the physician for the entity.  

Like the Stark Law Value-Based Arrangement exception, the Anti-Kickback Statute Care Coordination Arrangement safe harbor is designed to protect arrangements directed at the coordination and management of care. The Care Coordination Arrangement safe harbor has similar monitoring and revision requirements as the Stark Law exception.  

To read more about the Care Coordination Models click here. Be on the lookout in the coming days for Part 4 of the series, How to Create a Partial Risk Value-Based Enterprise.