CMS Seeking Input on Stark Law Regulatory Impact and Burden

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Recently, on June 20, 2018, the United States Center for Medicare and Medicaid Services (CMS) issued a Request for Information (RFI), looking for recommendations and input on how to address “any undue impact and burden of the physician self-referral law (also known as the “Stark Law”), focusing in part on how the law may impede care coordination, a key aspect of systems that deliver value.”

The June MedPAC report suggested revising the Stark Law to eliminate the “per unit of service” rule for physician-owned distributorships (PODs) and making PODs an entity within designated health services (DHS). This would mean physicians would not be able to refer patients to PODs they had ownership in, with few exceptions. MedPAC also aims to have PODs identified as PODs in the Open Payments reporting program. “The goal of any change to the Stark Law would not be to ban PODs per se, but rather to prohibit physician self-referral involving PODs,” the report states.

Over the last several months, CMS has sought input about the regulatory burden associated with the self-referral law, and has received more than 2,600 comments from various stakeholders.

Private Reaction

The American Hospital Association (AHA) has been vocal in pushing for changes to the Stark Law, calling it outdated. AHA argues that the law presents “nearly impenetrable roadblocks in the move toward value-based care.”

“Congress should create a clear and comprehensive safe harbor under the anti-kickback law for arrangements designed to foster collaboration in the delivery of health care and incentivize and reward efficiencies and improvement in care,” AHA said in prior testimony before the Subcommittee on Health of the Ways and Means Committee. “In addition, the Stark Law should be reformed to focus exclusively on ownership arrangements. Compensation arrangements should be subject to oversight solely under the anti-kickback law.”

Government Reaction

“Removing unnecessary government obstacles to care coordination is a key priority for this Administration,” said Health and Human Services (HHS) Deputy Secretary Eric Hargan. “We need to change the healthcare system so that it puts value and results at the forefront of care, and coordinated care plays a vital role in this transformation. Reviewing the Stark Law regulations is an important step forward to building a value-based system, which is one of Secretary Azar’s priorities at HHS. I am personally leading our recently launched Regulatory Sprint to remove barriers and help providers deliver the best team-based care. We welcome public input to get us there.”

“We are looking for information and bold ideas on how to change the existing regulations to reduce provider burden and put patients in the driver’s seat,” said CMS Administrator Seema Verma. “Dealing with the burden of the physician self-referral law is one of our top priorities as we move towards a health care system that pays for value rather than volume.”

Verma also appeared sympathetic in a CMS blog post she authored, noting, “The Stark Law and regulations, in its current form, may hinder” a “truly value-based, patient-centered health care system” in which “doctors and other providers … work together with patients.”

Comment Submission

CMS is in particular looking for input on the structure of arrangements between parties that participate in alternative payment models or other newer financial arrangements, the need for revisions or additions to exceptions to the Stark Law, and terminology related to alternative payment models and the Stark Law. Public comments are due by August 24, 2018.

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