Stark Law: Value-Based Arrangements -- 411.357(aa)(3)

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

(3) Value-based arrangements. Remuneration paid under a value-based arrangement, as defined at §411.351, if the following conditions are met:

(i) The arrangement is set forth in writing and signed by the parties. The writing includes a description of—

(A) The value-based activities to be undertaken under the arrangement;
(B) How the value-based activities are expected to further the value-based purpose(s) of the value-based enterprise;
(C) The target patient population for the arrangement;
(D) The type or nature of the remuneration;
(E) The methodology used to determine the remuneration; and
(F) The outcome measures against which the recipient of the remuneration is assessed, if any.

(ii) The outcome measures against which the recipient of the remuneration is assessed, if any, are objective, measurable, and selected based on clinical evidence or credible medical support.
(iii) Any changes to the outcome measures against which the recipient of the remuneration will be assessed are made prospectively and set forth in writing.
(iv) 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.
(v) The remuneration is for or results from value-based activities undertaken by the recipient of the remuneration for patients in the target patient population.
(vi) The arrangement is commercially reasonable.
(vii)(A) No less frequently than annually, or at least once during the term of the arrangement if the arrangement has a duration of less than 1 year, the value-based enterprise or one or more of the parties monitor:

(1) Whether the parties have furnished the value-based activities required under the arrangement;
(2) Whether and how continuation of the value-based activities is expected to further the value-based purpose(s) of the value-based enterprise; and
(3) Progress toward attainment of the outcome measure(s), if any, against which the recipient of the remuneration is assessed.

(B) If the monitoring indicates that a value-based activity is not expected to further the value-based purpose(s) of the value-based enterprise, the parties must terminate the ineffective value-based activity. Following completion of monitoring that identifies an ineffective value-based activity, the value-based activity is deemed to be reasonably designed to achieve at least one value-based purpose of the value-based enterprise—

(1) For 30 consecutive calendar days after completion of the monitoring, if the parties terminate the arrangement; or
(2) For 90 consecutive calendar days after completion of the monitoring, if the parties modify the arrangement to terminate the ineffective value-based activity.

(C) If the monitoring indicates that an outcome measure is unattainable during the remaining term of the arrangement, the parties must terminate or replace the unattainable outcome measure within 90 consecutive calendar days after completion of the monitoring.

(viii) The remuneration is not an inducement to reduce or limit medically necessary items or services to any patient.
(ix) 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.
(x) 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.

(xi) 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.
(xii) For purposes of this paragraph (aa)(3), “outcome measure” means a benchmark that quantifies:

(A) Improvements in or maintenance of the quality of patient care; or
(B) Reductions in the costs to or reductions in growth in expenditures of payors while maintaining or improving the quality of patient care.