CMS: Changes Coming to Stark Self-Referral Law
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Wednesday, July 18, 2018 05:51 PM

The Centers for Medicare & Medicaid Services (CMS) is hoping to issue a proposed regulation by the end of the year that would loosen the “Stark law” prohibiting physician self-referral, CMS administrator Seema Verma has said.  "One of the barriers around [promoting] value-based care is burdensome regulations, and that's where Stark comes into it," Verma said. "We are going to do something on Stark -- I'm very certain about that -- and we hope to have something out by the end of the year."

The 1989 law, named for former congressman Fortney H. “Pete" Stark (D-Calif.), "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, investment, or compensation), unless an exception applies," CMS notes on its website.

Designated health services include clinical lab services, physical therapy, occupational therapy, radiology, durable medical equipment, home health services, outpatient prescription drugs, and inpatient and outpatient hospital services.

Richard Deem, senior vice president for advocacy at the American Medical Association (AMA), pointed out that the Stark law "was created in a whole different environment than we're trying to operate in now ... Right now we're talking about more collaboration, whether it's an ACO [accountable care organization] or a bundled payment arrangement. Obviously we’re going to have to rethink things if we want to collaborate and coordinate."

Verma also discussed other moves that CMS was making to lessen the regulation burden on providers, and she hinted that the agency might be moving toward “site-neutral” payments, in which all Medicare providers are paid the same for a particular procedure or service no matter where it was preformed. As it stands now, "we're paying differently for the exact same service in one setting versus another, and the provider community is responding to that," she said. “You see hospitals buying up physician practices because then they can bill more for the exact same service.”

"States are trying to do innovative things ... and we want to be supportive of that. This hasn’t changed our commitment to helping people rise out of poverty," Verma noted.