CMS issues final rule modernizing Stark law

By Brian Casey, staff writer

November 20, 2020 -- Saying it is lifting the weight of "punishing bureaucracy" from the backs of physicians, the U.S. Centers for Medicare and Medicaid Services (CMS) on November 20 announced its final rule implementing major changes to the Stark law, a set of federal rules that prohibit physicians from self-referral.

The CMS said the changes are designed to bring regulations interpreting the Stark law up to date with the emerging environment of value-based care, in which healthcare providers are rewarded for keeping patients healthy, rather than the fee-for-service system, which rewards them for performing more tests.

First enacted in 1989, the Stark law (named after Rep. Pete Stark of California) was designed to control runaway healthcare costs by preventing physicians from referring patients to healthcare entities in which they had a financial interest. However, the law had a number of loopholes, such as a provision that allowed nonradiologist physicians to perform imaging exams on their patients as long as the equipment was sited in their offices.

In announcing the final rule, the CMS said that the Stark law had become a bureaucratic barrier that forced providers to spend time and money on complying with administrative burdens -- money that could have been spent on patient care. The rule includes the following provisions:

  • Finalizes permanent exceptions for value-based care arrangements that will enable physicians and other providers to enter new arrangements without fear they will violate the physician self-referral law
  • Provides additional guidance on requirements of exceptions to the physician self-referral law to make it easier for providers to comply
  • Finalizes protections for what the CMS calls "nonabusive, beneficial arrangements," regardless of whether the parties operate in a fee-for-service or value-based payment system
  • Reduces administrative burdens that drive up costs by taking money that previously may have been spent on administrative compliance and redirecting it to patient care

The final rule issued on November 20 culminates a process that began in 2017, according to the CMS. The agency issued the changes as a proposed rule in October 2019. The new provisions in the rule will go into effect 60 days after it is published in the Federal Register. More information about the final rule is available on the CMS website.

Copyright © 2020

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