On November 20, 2020, the Department of Health and Human Services (HHS) finalized a set of sweeping changes to the regulatory framework that governs fraud and abuse in the Medicare and Medicaid programs. Among other changes, these reforms remove historical barriers to collaboration between providers and health tech companies on digital health initiatives, including those that promote care coordination and drive value-based efficiencies.
This update provides examples of digital health partnerships that could potentially qualify for protection under the newly finalized rules, which are scheduled to take effect on January 19, 2021. See here for a more detailed discussion of HHS’s newly finalized rules.
Addressing Long-standing Barriers to Innovative Digital Health Initiatives
When providers and digital health companies provide something of value—such as health IT hardware, software, remote monitoring devices, mobile devices, data analytics or related services—to health systems or other providers, federal law often requires that the recipient pay “fair market value” for the items or services received. This requirement limits arrangements that could otherwise promote care coordination or improve quality of care, such as a large provider subsidizing the cost of health IT for smaller providers that share a common patient pool, or a digital health company providing its platform or device to a provider for free or at a price below fair market value.
This restriction arises under the Anti-Kickback Statute, a federal law that generally prohibits anyone from offering or accepting “remuneration” with the purpose of inducing or rewarding referrals in federal healthcare programs. HHS has defined a number of “safe harbors” to protect various arrangements deemed benign or beneficial, but the safe harbors had not be ..
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