On June 25, 2018, the Centers for Medicare and Medicaid Services (“CMS”) published a Request for Information (“RFI”) in the Federal Register regarding section 1877 of the Social Security Act, also known as the “physician self-referral law” or the “Stark Law”. The Stark Law is a strict liability statute that: (i) prohibits a physician from making referrals for certain designated health services (“DHS”) payable by Medicare to an entity with which the physician, or an immediate family member of the physician, has a financial relationship, unless a specific exception applies; and (ii) prohibits that entity from filing claims with Medicare, or billing another individual, entity, or third-party payer, for those referred services.

CMS has made facilitating coordinated care a top priority and, through internal discussion and external stakeholder input, has identified certain aspects of the Stark Law as potential barriers to coordinated care. In order to assist CMS’ efforts to assess and address the Stark Law in this context, the RFI, “…seeks input from the public on how to address any undue regulatory impact and burden of the physician self-referral law.”

Specifically, HHS requested the following information:

  • Information regarding either existing or potential arrangements that involve DHS entities and referring physicians, including concerns regarding the applicability of existing exceptions to the Stark Law and/or the ability of the alternative payment models and novel financial arrangements to satisfy the requirements of an existing exception, as well as the extent to which the Stark Law may be impacting such arrangements.
  • Whether new approaches or additional exceptions to the Stark law are necessary to protect: (i) financial arrangements between DHS entities and referring physicians who participate in the same alternative payment model; and (ii) financial arrangements that involve integrating and coordinating care outside of an alternative payment model.
  • Insights on, and examples of when, compensation should and should not be considered to account for: (i) the volume or value of referrals by a physician; or (ii) other business generated between parties to an arrangement, in the context of the Stark Law and alternative payment/financial arrangements.
  • The utility of: (i) current Stark Law exceptions regarding risk-sharing arrangements and remuneration unrelated to DHS; and (ii) the special rule for compensation under a physician incentive plan within the personal service arrangements exception.
  • Thoughts on new or revised definitions, or new terms, in the context of healthcare delivery, payment reform, and the Stark Law, for: (i) alternative payment model; (ii) care coordination; (iii) clinical integration; (iv) financial integration; (v) risk/risk-sharing; (vi) physician incentive program; (vii) gainsharing; (viii) health plan; (ix) health system; (x) integrated delivery system; (xi) enrollee; (xii) commercial reasonableness; (xiii) fair market value; and (xiv) any other terminology relevant to the RFI.
  • What barriers, if any, exist to qualifying as a ‘‘group practice’’ under Stark Law regulations.
  • The role of transparency for beneficiaries in the context of the Stark Law and how CMS could design a model to test whether new or modified transparency safeguards could effectively address the impact of financial self-interest on physician medical decision-making.
  • General insights regarding the Stark Law’s compliance cost for regulated entities and whether, and how, CMS should measure the effectiveness of the physician self-referral law in preventing unnecessary utilization and other forms of program abuse relative to this cost.
  • Recent studies assessing the positive or negative effects of the Stark Law on the healthcare industry.

Comments to the RFI must be received no later than 5:00 pm on August 24, 2018, to be considered. Comments can be submitted electronically or by mail to CMS. All comments received before the close of the comment period will be posted here for public viewing. All individuals and entities interested in the Stark Law, including those interested in coordinated care and alternative payment/financial models, should consider submitting comments.

Posted by Robert A. Paster