In the face of the worst pandemic in memory, we’ve seen heroes emerge in hospitals, doctors’ offices and across the healthcare industry. It has become clear that patients rely on more than just their primary physician to receive the care they need, with many others, including the medical technology industry, playing a pivotal role in patient health. 

Unfortunately, a law written back in the 1970s—the federal Anti-Kickback Statute—today deters coordination among healthcare providers, and between providers and medtech companies, that would achieve better and lower-cost outcomes for patients. 

The law was enacted to stop fraud and abuse nearly five decades ago (back when the hottest technology was the eight-track tape), in what was a predominantly fee-for-service system. The law rightly prevented providers from referring patients to other entities for services that would financially benefit themselves.

While the law was and still is critically important, our system has changed so much that it’s crucial to update the statute to reflect the more integrated way our health system works today—including the role medtech companies play in providing more patient-centered, value-based care that helps achieve better clinical outcomes, lower costs and increased accountability.

Medtech companies today can provide doctors and other providers with data, platforms and analytics to improve coordination and management of patient care, but integrating these into solutions for providers—which is what patients have come to expect as a given in our modern, connected age—is strongly deterred by the Anti-Kickback Statute. Modernizing the law is a crucial step toward fully including the medtech industry in our healthcare system’s ongoing transition away from the antiquated volume-based care model, where charges and fees are based simply on the number of procedures and services a patient might receive. 

Value-based care, however, looks to align incentives so that there is a shared accountability to achieve desired outcomes for patients. In other words, real value. The law’s modernization would help make that happen. A recent rule proposed by HHS would modernize the statute to facilitate the transition to value-based care by making critical updates to safe-harbor regulations. 

If the statute is going to be updated, it must be done accurately and completely, and it should seek to integrate all contributors to healthcare to maximize the potential of value-based care. This means including all types of medtech manufacturers in the final regulation so that all key contributors in the healthcare system can work together for the patient. 

To realize the potential of value-based care and its promise of better outcomes at lower costs, we encourage the Office of Management and Budget to act now to finalize and issue a new, comprehensive rule for patients, providers, hospitals and medtech companies. Numerous federal health agencies, including HHS, utilized a commendably broad-based approach, seeking input repeatedly from healthcare leaders and the public to develop the final rule. There have been roundtables and opportunities for informal public input, as well as the formal and extensive notice-and-comment rulemaking process (a 75-day period that ended Dec. 31, 2019). There is widespread agreement that this modernization is necessary—and past due.

This pandemic has taught us that we must act quickly and effectively when a problem is identified. It has also highlighted the importance of improving care coordination. Updating the Anti-
kickback Statute from its disco-era origin to reflect how our healthcare system operates in 2020 and beyond will ultimately benefit the patients we serve—a goal we all share. 

Modernizing the statute will enable investments (for example, in data collection infrastructure, training, and systems) in the transition to value-based care. The medtech industry, hospital systems and other providers need a prompt release of a final rule to update an antiquated law, one that allows more efficiently coordinated care and a shared responsibility for achieving better patient health outcomes with lower costs.



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