Dive Brief:
- The medical device lobby is recommending three new safe harbors to the Anti-Kickback Statute in response to a Request for Information by the HHS Office of Inspector General. The watchdog asked for input on how to change provisions that act as barriers to value-based care or impede coordinated care in August.
- AdvaMed argues that the AKS has not kept up with reimbursement changes in a healthcare system that is shifting from fee-for-service to value-based models.
- Specifically, the trade group is asking for safe harbors for value-based pricing arrangements, value-based warranty arrangements and value-based risk-sharing arrangements.
Dive Insight:
It's not just AdvaMed making the pitch. The American Hospital Association in its comment recommended new safe harbors for value-based payment arrangements and patient assistance programs, while the American Medical Association suggested a broad safe harbor for coordinated care to promote alternative payment models as well as a safe harbor to allow sharing of cybersecurity products and services.
The AdvaMed comment follows at least two HHS OIG advisory opinions that suggest the government may be open to new types of arrangements historically limited by the kickback law.
Chris White, AdvaMed COO and general counsel, told reporters on a conference call that while the trade group was encouraged by OIG permitting the types of arrangements, more needs to be done.
"The OIG advisory opinions are applicable to proposed arrangements that would be submitted to the OIG in advance," White said. "But they are applicable really only to one party, the one that submitted the request. What we seek to do here is to achieve clarity for the industry overall."
White argued that current AKS safe harbors are too narrow for medtech companies to participate in value-based arrangements with providers.
"Given the nature of that statute, the restraint is not a hypothetical restraint, it is not a soft restraint," White said. "This is a criminal statute — it has the effect of chilling arrangements that are not squarely within the safe harbor."
Terry Chang, AdvaMed VP and assistant general counsel, told reporters that AdvaMed has previously submitted similar suggestions to OIG during its annual solicitation for areas where new safe harbors may be needed.
"That's where we've submitted comment in the past seeking new value-based safe harbors," Chang said. "We've refined them over time to provide greater clarity about how they would operate. We're encouraged by the RFI process itself and are hopeful that this will inform the development of proposed rules."
If regulatory action to put in place new safe harbors lags, White suggested there is interest in lobbying Congress to implement them through legislation.
On the pharmaceutical side, at least one powerful trade group warned that "new value-based contracting tools are not a panacea for rising drug prices," warning they may not induce cost savings for the healthcare system.
The Pharmaceutical Care Management Association wrote that while the PBM trade group supports permitting outcomes or indications-based drug payments, OIG "should recognize the limits inherent in such an approach, as well as the incentives for some actors in the drug supply chain to use 'value' to increase, rather than decrease, profit."
