CMS Final Rule Updates Stark Law

Last Friday, the Centers for Medicare and Medicaid Services announced a final rule that makes changes to the Physician Self-Referral Law, or Stark Law, which prohibits doctors from referring patients to services or providers owned or employed by the referring physician. The law has caused issues for participants in value-based reimbursement initiatives until now.

Stark Law, unchanged since its 1989 drafting, was designed to discourage self-provided kickbacks from Medicare for doctors who worked within the fee-for-service model because providing more services was incentivized. The rule changes were originally proposed in October 2019.

According to Healthcare Finance, in value-based care models, doctors take on accountability for total cost of care which mitigates the risks involved with self-referral. Additionally, the law in its prior form was a potential deterrent for providers who could participate in value-based care models, fearing they may violate the law which carried severe penalties.

CMS says that changes to the law were part of a larger effort to reduce paperwork and unnecessary regulations. From a CMS press release from November 20, the agency explains further:

Through the Patients over Paperwork initiative, the final rule opens additional avenues for physicians and other healthcare providers to coordinate the care of the patients they serve – allowing providers across different healthcare settings to work together to ensure patients receive the highest quality of care.

The press release goes on to say that the final rule provides additional guidance on requirements that must be met for physicians and providers to comply with Stark Law. The final rule also provides exceptions and flexibilities for cybersecurity technology arrangements.

Read more at Becker’s Hospital Review.

Additional remarks from CMS can be found here.