The Centers for Medicare & Medicaid Services (CMS) on Friday finalized changes to the Physician Self-Referral Law, more commonly referred to as the Stark Law, which prohibits physicians from making referrals to providers or entities if they have a financial relationship with them. Here is a summary of the changes.
The rule, which is scheduled to be published in the Federal Register on December 2, makes long-awaited changes to regulations that CMS said have burdened health care providers with added administrative costs and impeded the health care system’s move toward value-based reimbursement.
The old federal regulations, enacted in 1989, were designed for a fee-for-service health care system that provides financial incentives to deliver more services. CMS said that the Stark rule’s bureaucratic barriers to value were one of the top concerns that providers raised during listening sessions the agency conducted in 2017 as part of its “Patients over Paperwork” initiative.
“When we kicked off our Patients Over Paperwork initiative in 2017, we heard repeatedly from front-line providers that our outdated Stark regulations saddled them with costly administrative burden and hindered value-based payment arrangements,” said CMS Administrator Seema Verma in an announcement about the rule. “That sound you hear is the mingled cheers and exclamations of relief from doctors and other health care professionals across the county as we lift the weight of our punishing bureaucracy from their backs.”
The rule, which takes effect January 19, 2021 makes the following changes:
- Establishes new, permanent exceptions for value-based arrangements that will permit physicians and other health care providers to design and enter into value-based arrangements without fear that legitimate activities to coordinate and improve the quality of care for patients and lower costs would violate the physician self-referral law. The exceptions apply regardless of whether the arrangement relates to care furnished to people with Medicare or other patients.
- Finalizes additional guidance on key requirements of the exceptions to the physician self-referral law to make it easier for physicians and other health care providers to make sure they comply with the law.
- Finalizes protection for non-abusive, beneficial arrangements that apply regardless of whether the parties operate in a fee-for-service or value-based payment system–such as donations of cybersecurity technology that safeguard the integrity of the health care ecosystem.
- Reduces administrative burdens that drive up costs by taking money previously spent on administrative compliance and redirecting it to patient care.
Alex Azar, secretary of the Department of Health and Human Services, called the changes “historic.” The reforms, he said in the announcement, will lead to “better care, including innovative arrangements with digital technology that may help patients receive care during the COVID-19 pandemic.”