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Physician Wellness Program Exception
Wednesday, June 21, 2023

On Dec. 29, 2022, the Consolidated Appropriations Act (the “CAA”) was signed into law. The CAA provides for a new exception to the Stark Law and Anti-Kickback Statute (the “AKS”). Section 4126 of the CAA introduces a new exception (the “Exception”) for physician wellness programs that allow healthcare entities to provide mental and behavioral health programs to physicians and other clinicians.[1]

The Exception as Applied to the Stark Law

The Stark Law exception, located at 42 U.S.C. § 1395nn(e)(9), is not considered to be a compensation arrangement under subsection (a)(2)(B) and permits certain healthcare entities to offer mental or behavioral health improvement programs to referring physicians.[2] The primary purpose of this exception is to prevent suicide, improve mental health, and provide training to promote the mental health of physicians.[3] Importantly, the exception conforms with the Lorna Breen Health Care Provider Protection Act (the “Lorna Act”). The Lorna Act authorizes the U.S. Department of Health and Human Services (the “HHS”) to award hospitals and other healthcare entities with grants for evidence-based programs to improve mental health and resiliency for healthcare professionals.[4] Thus, the CAA ensures that healthcare entities can utilize the funds provided under the Lorna Act to address the needs of their physicians without violating the Stark Law or AKS.[5] Unlike other Stark Law exceptions, there is no cap on the dollar value of these programs, which allows entities to implement more sophisticated and effective wellness programs.[6]

  1. How to Qualify

Although there is no dollar value limit on the benefits a physician may receive, the program must meet a number of requirements. First, the program must furnish benefits in the form of “counseling, mental health services, a suicide prevention program, or a substance use disorder prevention and treatment program.”[7] Second, the program must be made available to a physician for the primary purpose of preventing suicide, improving mental health and resiliency, or providing training in appropriate strategies to promote the mental health and resiliency of the physician.[8] Third, the program must be laid out in a written policy that is to be approved by the entity’s governing body before the program’s implementation.[9] Fourth, the program must be offered to a physician by a qualified healthcare entity.[10] Fifth, it must be offered to all physicians who practice in the geographical area served by that entity, including those who hold appointments to the staff of, or have clinical privileges at, such an entity. Sixth, the program must be offered on the same terms to all such physicians and must not be affected by the value or number of referrals generated by the physician.[11] Lastly, the program must be backed by evidence.[12] The CAA also leaves the door open for the imposition of future requirements by the HHS Secretary through regulation.

The written policy that is submitted for approval must detail the program’s content and duration, describe the evidence used to support its structure and design, state the estimated cost of the program along with the personnel who will be conducting it, and also provide a method for evaluating the program’s effectiveness.[13]

The wellness program exception, however, is not available to all healthcare entities. In order to be a qualified entity, it must have a formal medical staff such as a “hospital, ambulatory surgical center, community health center, rural emergency hospital, rural health clinic, skilled nursing facility, or a similar entity.”[14]

  1. The Exception as Applied to the Anti-Kickback Statute

The safe harbor under the AKS essentially mirrors that of the Stark Law and is located at 42 U.S.C. § 1320a-7b(b)(3)(L). The main difference is that the exception here not only applies to physicians but also to other clinicians.[15] Further, the AKS safe harbor does not explicitly include rural health clinics. However, since it is not required that an entity operate under a safe harbor provision in order to comply with the AKS, a program offered by a rural health clinic that otherwise complies with the requirements of the Stark Law exception is unlikely to violate the AKS.[16]

  1. Is the Exception Available to Qualified Entities Now?

Although other Stark Law exceptions and AKS safe harbors are usually promulgated through agency rulemaking, this wellness program exception is self-executing under the CAA.[17] Therefore, programs offered on or after December 29, 2022 that satisfy the exception’s requirements will allow authorized entities to remain in compliance with the Stark Law or AKS.

Conclusion

In sum, the new physician wellness program exception will allow healthcare entities to offer mental and behavioral health support programs without the threat of violating the Stark Law or AKS. The aim of the CAA is to help improve the mental health of healthcare providers and ultimately reduce healthcare costs and benefit patient outcomes. Entities that seek to implement such a program should carefully evaluate each requirement of the exception to ensure compliance. Moreover, parties conducting business with an entity who has implemented a program under this exception should also make sure it is in compliance with the applicable requirements.

Myatt McClure also contributed to this article.


[1] Hamilton Barber, New Stark Law and Anti-Kickback Statute Physician Wellness Program Exception, JDSUPRA (April 11, 2023) https://www.jdsupra.com/legalnews/new-stark-law-and-anti-kickback-statute-5871470/.

[2] 42 U.S.C.A. § 1395nn(e)(9).

[3] Id.

[4] Pub. L. 117-105.

[5] Annie C. Lee et al., Physician Wellness Programs: A New Stark Law Exception and AKS Safe Harbor to Combat Burnout, Nat’l. L. Rev. (June 12, 2023) https://www.natlawreview.com/article/physician-wellness-programs-new-stark-law-exception-and-aks-safe-harbor-to-combat.

[6] See generally 42 U.S.C.A. § 1395nn.

[7] 42 U.S.C.A. § 1395nn(e)(9).

[8] Id.

[9] Id.

[10] Id.

[11] Id.

[12] Id.

[13] Id.

[14] Id.

[15] 42 U.S.C.A. § 1320a-7b(b)(3)(L)(i)(II).

[16] Denise Burke et al., Congress Adds AKS and Stark Law Exceptions for Certain Wellness Programs, McDermott Will & Emery: Insights (May 25, 2023) https://www.mwe.com/insights/congress-adds-aks-and-stark-law-exceptions-for-certain-wellness-programs/#:~:text=The%20Stark%20and%20AKS%20wellness,to%20rise%20among%20healthcare%20providers.

[17] Lee, supra note 5.

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