Stark Law Overhaul May Be Ahead


Stark Law Overhaul May Be Ahead


The Department of Health and Human Services (HHS) aims to release proposed rules amending the physician self-referral (Stark Law) regulations and safe-harbors under the anti-kickback statute by July. The American Hospital Association (AHA) and the Centers for Medicare & Medicaid Services (CMS) are working together with the HHS on a key part of proposed regulation that will remove barriers to doctors participating in value-based arrangements. This presents opportunities to improve care for patients as well as provide financial incentives and rewards for physician practices implementing new care models.

Doctors have been clamoring for an update to the Stark Law for years. Worries they may violate the Stark Law if they refer patients to a hospital or lab that they have a financial relationship in, prevents many practitioners from participating in value-based arrangements. Last year in fact, the US Department of Health and Human Services, Office of Inspector General, had issued a notice saying the physician self-referral law was a potential barrier to coordinated care, and asked for safe harbors. Some opponents to change feel that self-referral to physician-owned hospitals which cherry-pick patients increases costs to businesses and taxpayers and continue support of the ban.

CMS Administrator Seema Verma explained the updated regulation likely to be released later this year: "Some changes include clarifying regulatory definition of volume or value, commercial reasonableness and fair-market value; addressing issues such as lack of signature, incorrect dates or other areas of technical noncompliance; and updating the regulation to address a world in which there are cybersecurity and electronic health records requirements.”

Originally intended as an anti-kickback statute, the Stark Law has not seen significant changes since its inception in 1989. The Stark Law generally prohibits a physician from making a referral of designated health services to an entity with which he or she (or an immediate family member) has a financial relationship. There are several excepted compensation arrangements - these include arrangements for the rental of office space and equipment, bona fide employment relationships, group practice arrangements with hospitals, and certain fair-market-value compensation arrangements. The goal of the update would be to address changes in the healthcare world that include the implementation of electronic health records and cybersecurity changes. It will help spur better care coordination and support removal of barriers to innovation while continuing to provide appropriate safeguards and better patient outcomes.

CONTACT US: Compensation models for physicians continue to evolve. Paradigms are changing in an effort to develop value-based over volume-based arrangements that would benefit patients. Let your accounting and healthcare professionals at Fuoco Group and TFG Health Services help you explore your options and advise you regarding alternative payment and practice models that would provide the appropriate incentives for shared risks or shared savings. Call toll free for a complimentary consultation: 855-534-2727.


 

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