Congress Adds AKS and Stark Law Exceptions for Certain Wellness Programs - McDermott Will & Emery

Congress Adds AKS and Stark Law Exceptions for Certain Wellness Programs


As a part of the Consolidated Appropriations Act, 2023 (CAA), Congress passed new exceptions to the Physician Self-Referral Law (Stark Law) and the federal Anti-Kickback Statute (AKS) allowing certain healthcare entities to provide mental health or behavioral health improvement and/or maintenance programs to physicians and other clinicians.

The Stark Law prohibits physicians from referring patients for certain designated health services payable by Medicare to an entity with which the physician (or an immediate family member) has a financial relationship, unless an exception applies, and prohibits such entities from filing claims with Medicare for the referred designated health services. Similarly, the AKS makes it a crime for any person to knowingly and willfully offer, pay, solicit or receive any remuneration to induce a person to make referrals for items or services that may be covered by Medicare or another federal healthcare program. Absent a statutory or regulatory exception or safe harbor, healthcare entities are subject to risks under the AKS and Stark Law when providing free services to physicians or clinicians that refer patients to the entity.

The new exceptions under the CAA apply to wellness programs offered on or after December 29, 2022.

In Depth

Stark Wellness Program Exception

The CAA included a new compensation arrangement exception to the Stark Law for physician wellness programs. This Stark wellness program exception is codified at 42 U.S.C. 1395nn(e)(9). To date, the US Department of Health and Human Services (HHS) has not promulgated regulations further implementing the statutory changes.

To qualify for the Stark wellness program exception, the arrangement must be for a bona fide mental health or behavioral health improvement or maintenance program offered to a physician by an entity. The program must meet the following requirements:

  • Consist of counseling, mental health services, a suicide prevention program, or a substance use disorder prevention and treatment program
  • 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
  • Be set out in a written policy, approved in advance of the program’s operation by the governing body providing the program, that includes at minimum a description of the content and duration of the program, a description of the evidence-based support for the design of the program, the estimated cost of the program, the personnel (including the qualifications of such personnel) conducting the program, and the method by which the entity will evaluate the use and success of the program, all of which must be updated in advance of substantial changes to the operation of the program
  • Be offered by an entity described below with a formal medical staff to all physicians who practice in the geographic area served by such entity, including physicians who hold bona fide appointments to the medical staff of such entity or otherwise have clinical privileges at such entity
  • Be offered to all such physicians on the same terms and conditions and without regard to the volume or value of referrals or other business generated by a physician for the entity
  • Be evidence-based and conducted by a qualified health professional
  • Meet any other regulatory requirements that may be imposed by the HHS Secretary through regulation.

The Stark wellness program exception is not available to all healthcare entities. Entities that are eligible to avail themselves of the Stark wellness program exception include hospitals, ambulatory surgical centers, community health centers, rural emergency hospitals, rural health clinics, skilled nursing facilities or similar entities, as determined by the HHS Secretary.

The Stark wellness program exception also requires that neither the provisions nor the value of the program be contingent upon the number or value of referrals made by a physician to the entity, or the amount or value of the other business generated by such physician for the entity.

AKS Wellness Program Exception

The CAA included similar amendments to the AKS, creating an exception for bona fide mental health or behavioral health improvement or maintenance programs.

The AKS wellness program exception largely matches the language and program types set out in the Stark wellness program exception but includes clinicians in addition to physicians. Oddly, the AKS wellness program exception does not explicitly include rural health clinics. Since operation within a safe harbor is not required for AKS compliance, however, a program offered by a rural health clinic that complies with all other requirements of the AKS wellness program exception would seem unlikely to violate the AKS, absent an intention to induce referrals.

Key Takeaways

  • The Stark and AKS wellness program exceptions provide a new avenue for qualified entities to provide additional mental and behavioral health resources to healthcare professionals at a time when burnout and other mental health concerns continue to rise among healthcare providers.
  • Entities seeking to structure a compliant wellness program should carefully evaluate each of the required components of the wellness program exceptions to avoid technical foot faults and unintentional non-compliance.
  • As more entities begin to avail themselves of the new wellness program exceptions, parties to potential transactions with eligible entities should inquire about such programs in due diligence and make sure such programs comply with the applicable requirements.