Trump Administration Moves to Ease Rules on Value-Based Care

Published December 9, 2019

Value-based care is a reimbursement system based on outcomes, not just on services performed.

The new rules, announced on October 9 and subject to a comment period, would modernize and clarify the Physician Self-Referral Law (known as the Stark Law) and the Federal Anti-Kickback Statute. The Stark Law got its name when it was enacted in 1989, after Rep. Pete Stark, a Democrat from California.

Part of Bigger Plan

HHS says the proposals will “ease the compliance burden for health care providers across the industry, while maintaining safeguards to protect patients and programs from fraud and abuse.”

The proposed rules are part of the “Regulatory Sprint to Coordinated Care” effort, which “seeks to promote value-based care by examining federal regulations that impede efforts among providers to better coordinate care for patients.”

HHS Deputy Secretary Eric Hargan says the reforms are historic, in a press statement.

“They are part of a much broader effort to update, reform, and cut back our regulations to allow innovation toward a more affordable, high quality, value-based health care system while maintaining the important protections patients need,” Hargan said.

No Fan of Stark Laws

The Stark Law prohibits physicians from referring patients to entities in which they may have a financial relationship, such as testing labs and treatment facilities.

The laws have had bad unintended consequences, says Phillip Eskew, D.O., J.D., physician, founder of DPC Frontier, and policy advisor to The Heartland Institute, which publishes Health Care News.

“The laws were poorly drafted and way too complex,” said Eskew. “This complexity has resulted in lots of wasted dollars to expensive law firms and decreases the ability of small and independent physician practices to compete with large hospital systems.”

The Challenge of Value-Based Care       

The idea behind clarifying the Stark Law and updating the Federal Anti-Kickback statute is to make “value-based” care easier to deliver.

Value-based care is like “pay for performance,” says Roger Stark, M.D., a health care policy analyst at the Washington Policy Center, retired physician, and policy advisor to The Heartland Institute, which publishes Health Care News. “The idea has been around for a long time, pushed both by the Trump and Obama administrations,” said Stark.

The problem with value-based care is that it can reduce access to doctors, says Stark.

“If you’re a physician, and you want to have good outcomes, the easiest way is to not take care of sick people and/or only treat healthy people,” said Stark.

“If I operate on an 80-year-old with diabetes and coronary artery disease who needs a hip replacement, well, if you think that patient is going to skew your statistics, you might give them some pain medication and pat them on the head,” said Stark. “So, it’s a real slippery slope.”

Transparency Is the Solution

Stark says the best way to improve value to patients is to not just revise regulations but to improve price transparency and make the consumer king.

“When you look at any other economic activity, it’s the consumer who drives quality,” said Stark. “If patients were responsible for paying for health care with their own health care dollars, I think we would see a huge trend toward, not only more consumerism, but consumer/patients demanding more quality since we already see this in every other area of economic activity.”

Eskew says price transparency would reduce the fraud and abuse that Stark Laws attempt to address. 

“If we had transparent pricing, then kickbacks would be obvious,” said Eskew.

“Right now, we have complicated and harsh Stark Laws and anti-kickback laws applied to physicians, yet we have no laws against the disgusting kickbacks running rampant in the pharmacy benefit manager (PBM) or broker worlds,” said Eskew. “If prices of MRIs, meds, labs, etc. were transparent at various hospitals and clinics, then any kickbacks would be obvious to the patient and the industry would police itself.”


Kenneth Artz ([email protected]) writes from Dallas, Texas.