Stark Law: Value-Based Arrangements with Meaningful Downside Financial Risk to the Physician -- 411.357(aa)(2)

(aa) Arrangements that facilitate value-based health care delivery and payment

(2) Value-based arrangements with meaningful downside financial risk to the physician - Remuneration paid under a value-based arrangement, as defined at § 411.351, if the following conditions are met:

(i) The physician is at meaningful downside financial risk for failure to achieve the value-based purpose(s) of the value-based enterprise during the entire duration of the value-based arrangement.
(ii) A description of the nature and extent of the physician's downside financial risk is set forth in writing.
(iii) The methodology used to determine the amount of the remuneration is set in advance of the undertaking of value-based activities for which the remuneration is paid.
(iv) The remuneration is for or results from value-based activities undertaken by the recipient of the remuneration for patients in the target patient population.
(v) The remuneration is not an inducement to reduce or limit medically necessary items or services to any patient.
(vi) 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.
(vii) If 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.

(viii) 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.
(ix) For purposes of this paragraph (aa), “meaningful downside financial risk” means that the physician is responsible to repay or forgo no less than 10 percent of the total value of the remuneration the physician receives under the value-based arrangement.