Insights & Resources

Medicare/Medicaid Fraud & Abuse Resource Center

    Back To Medicare/Medicaid Fraud & Abuse Resource Center

    Comparison Chart of Anti-Kickback Safe Harbors and Stark Exceptions -- Value-Based Arrangements with Full Financial Risk

    Value-Based Arrangements with Full Financial Risk – Current as of March 2021

    Stark
    Stark exception to the referral prohibition related to compensation arrangements that facilitate value-based health care delivery and payment – Value-Based Arrangements with full financial risk 42 CFR 411.357(aa)(1)

    Anti-Kickback
    Safe harbor to protect the exchange of anything of value between a VBE and VBE participant or between VBE participants pursuant to a value-based arrangement with full financial risk 42 CFR 1001.952(gg) 

     

    The VBE (directly or through a VBE participant, other than a payor, acting on behalf of the VBE) has assumed through a written contract or a value-based arrangement (or has entered into a written contract or a value-based arrangement to assume in the next 1 year) full financial risk from a payor.

    The value-based arrangement is set forth in writing, is signed by the parties, and specifies all material terms, including the value-based activities and the term.

     

    The VBE participant (unless the VBE participant is a payor) does not claim payment in any form from the payor for items or services covered under the contract or value-based arrangement between the VBE and the payor

     

    The remuneration is for or results from value-based activities undertaken by the recipient of the remuneration for patients in the target patient population.

    The value-based enterprise is at full financial risk (or is contractually obligated to be at full financial risk within the 12 months following the commencement of the value-based arrangement) during the entire duration of the value-based arrangement.

    The remuneration provided by, or shared among, the VBE and VBE participant:

    (i) Is directly connected to one or more of the VBE's value-based purposes
    (ii)  Does not include the offer or receipt of an ownership or investment interest in an entity or any distributions related to such ownership or investment interest; and
    (iii) Is not exchanged or used for the purpose of marketing items or services furnished by the VBE or a VBE participant to patients or for patient recruitment activities.

    The remuneration is not exchanged by:

    (i) A pharmaceutical manufacturer, distributor, or wholesaler;
    (ii) A pharmacy benefit manager;
    (iii) A laboratory company;
    (iv) A pharmacy that primarily compounds drugs or primarily dispenses compounded drugs;
    (v) Except to the extent the entity is a limited technology participant, a manufacturer of a device or medical supply;
    (vi) Except to the extent the entity or individual is a limited technology participant, an entity or individual that sells or rents durable medical equipment, prosthetics, orthotics, or supplies covered by a Federal health care program (other than a pharmacy or a physician, provider, or other entity that primarily furnishes services); or
    (vii) A medical device distributor or wholesaler that is not otherwise a manufacturer of a device or medical supplies.

    The remuneration is not an inducement to reduce or limit medically necessary items or services to any patient.

    The value-based arrangement does not induce parties to reduce or limit medically necessary items or services furnished to any patient.

    The remuneration is not conditioned on referrals of patients who are not part of the target patient population or business not covered under the value-based arrangement.

    The remuneration is not conditioned on referrals of patients who are not part of the target patient population or business not covered under the value-based arrangement.

    If the remuneration paid to the physician is conditioned on the physician's referrals to a particular provider, practitioner, or supplier, the value-based arrangement complies with both of the following conditions:

    (A) The requirement to make referrals to a particular provider, practitioner, or supplier is set out in writing and signed by the parties.
    (B) The requirement to make referrals to a particular provider, practitioner, or supplier does not apply if the patient expresses a preference for a different provider, practitioner, or supplier; the patient's insurer determines the provider, practitioner, or supplier; or the referral is not in the patient's best medical interests in the physician's judgment.

    The VBE provides or arranges for a quality assurance program for services furnished to the target patient population that:

    (i) Protects against underutilization; and
    (ii) Assesses the quality of care furnished to the target patient population.

    Records of the methodology for determining and the actual amount of remuneration paid under the value-based arrangement must be maintained for a period of at least 6 years and made available to the Secretary upon request.

    For a period of at least 6 years, the VBE or VBE participant makes available to the Secretary, upon request, all materials and records sufficient to establish compliance with the conditions of this safe harbor.

    “Full financial risk” means that the value-based enterprise is financially responsible on a prospective basis for the cost of all patient care items and services covered by the applicable payor for each patient in the target patient population for a specified period of time.

    “Prospective basis” means that the value-based enterprise has assumed financial responsibility for the cost of all patient care items and services covered by the applicable payor prior to providing patient care items and services to patients in the target patient population.

     

    Full financial risk means the VBE is financially responsible on a prospective basis for the cost of all items and services covered by the applicable payor for each patient in the target patient population for a term of at least 1 year.

    Prospective basis means that the VBE has assumed financial responsibility for the cost of all items and services covered by the applicable payor prior to the provision of items and services to patients in the target patient population.

    Items and services means health care items, devices, supplies, and services.

    Manufacturer of a device or medical supply means an entity that meets the definition of applicable manufacturer in 42 CFR 403.902 because it is engaged in the production, preparation, propagation, compounding, or conversion of a device or medical supply that meets the definition of covered drug, device, biological, or medical supply in 42 CFR 403.902, but not including entities under common ownership with such entity.

    Target patient population means an identified patient population selected by the VBE or its VBE participants using legitimate and verifiable criteria that:

    (A) Are set out in writing in advance of the commencement of the value-based arrangement; and
    (B) Further the value-based enterprise's value-based purpose(s).

    Value-based activity means any of the following activities, provided that the activity is reasonably designed to achieve at least one value-based purpose of the value-based enterprise:

    (1) The provision of an item or service;
    (2) The taking of an action; or
    (3) The refraining from taking an action

    Value-based activity does not include the making of a referral.

    Value-based arrangement means an arrangement for the provision of at least one value-based activity for a target patient population to which the only parties are:

    (A) The value-based enterprise and one or more of its VBE participants; or
    (B) VBE participants in the same value-based enterprise.

    Value-based enterprise or VBE means two or more VBE participants:

    (A) Collaborating to achieve at least one value-based purpose;
    (B) Each of which is a party to a value-based arrangement with the other or at least one other VBE participant in the value-based enterprise;
    (C) That have an accountable body or person responsible for financial and operational oversight of the value-based enterprise; and
    (D) That have a governing document that describes the value-based enterprise and how the VBE participants intend to achieve its value-based purpose(s).

    Value-based enterprise participant or VBE participant means an individual or entity that engages in at least one value-based activity as part of a value-based enterprise, other than a patient acting in their capacity as a patient.

    Value-based purpose means:

    (A) Coordinating and managing the care of a target patient population;
    (B) Improving the quality of care for a target patient population;
    (C) Appropriately reducing the costs to or growth in expenditures of payors without reducing the quality of care for a target patient population; or
    (D) Transitioning from health care delivery and payment mechanisms based on the volume of items and services provided to mechanisms based on the quality of care and control of costs of care for a target patient population.