CMS Seeks Comments on Reducing Burden of Stark Law

PUBLISHED: Jun 26, 2018
Relevant to: All Healthcare Organizations

The Centers for Medicare & Medicaid Services (CMS) is seeking information on how to address any undue regulatory impact and burden of the physician self-referral law (Stark Law). CMS has made facilitating coordinated care a top priority and seeks to identify ways in which its regulations may impose undue burdens on the healthcare industry and serve as obstacles to coordinated care and its efforts to deliver better value and care for patients. Through internal discussion and input from external stakeholders, CMS has identified some aspects of the physician self-referral law as a potential barrier to coordinated care. CMS is evaluating how to address “…unnecessary obstacles to coordinated care, real or perceived, caused by the physician self-referral law…”

The Stark Law was enacted in 1989 and addresses the concern that health care decision making can be unduly influenced by a profit motive. When physicians have a financial incentive to refer patients for health care services, this incentive may affect utilization, patient choice, and competition. Overutilization may occur when items and services are ordered that would not have been ordered absent a profit motive. Further, a patient’s choice can be affected when he or she is steered to less convenient, lower quality, or more expensive providers of health care that are sharing profits with, or providing other remuneration to, the referring practitioner. Where referrals are controlled by those sharing profits or receiving other remuneration, the medical marketplace suffers since new competitors may have more difficulty generating business on superior quality, service, or price alone. By design, the physician self-referral law is intended to disconnect a physician’s health care decision making from his or her financial interests in other health care providers and suppliers.

Specifically, the law:

  • Prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership or compensation), unless an exception applies.
  • Prohibits the entity from filing claims with Medicare (or billing another individual, entity, or third party payer) for those referred services. The prohibitions are absolute unless the physician’s referral is permitted under an enumerated exception. The statute establishes a number of specific exceptions, and grants the Secretary the authority to create

CMS is specifically looking into and seeking comment on how Stark Laws impact the structure of arrangements involving alternative payment models. Comments will be accepted through August 24, 2018. Follow the link below for more information and for comment submission instructions.

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