CMS Considers Relaxing Stark Law Requirements

June 25th, 2018

By Jill Drachenberg, Editor, Relias-AHC Media

Officials with the Centers for Medicare & Medicaid Services (CMS) have announced they are seeking public comment on a proposal to loosen the requirements of the physician self-referral law, known as the Stark Law.

CMS Administrator Seema Verma wrote in a blog post that CMS has been seeking public comment for the past year on areas of “high regulatory burden,” receiving more than 2,600 comments from healthcare providers.

“One of the top areas of burden identified … was compliance with the physician self-referral law and its accompanying regulations,” Verma wrote. “In response to these concerns, CMS undertook a review of the existing regulations to determine where the agency could consider potential areas for burden reduction.”

The Stark Law prevents physicians from referring Medicare and Medicaid patients to healthcare entities in which the physician has a financial relationship. The law was enacted in 1988 to help curb healthcare fraud and abuse.

The law has come under some criticism from healthcare groups as reimbursement shifts from fee-for-service to quality-based. The American Medical Association sent a letter to the Office of Inspector General in February, stating that some provisions of the anti-fraud and abuse laws could hinder physicians participating in alternative payment models.

“Tying compensation to the quality, outcomes, and spending on care; equipping providers with tools to improve care; and investing in tools to clinically and financially integrate all may run afoul of these [fraud] laws,” according to the letter. “More options and flexibility are needed to encourage physician-led alternative payment arrangements on a wider scale. Thus, broader flexibility from the fraud and abuse laws is needed to help realize the full potential of innovative models.”

The CMS request for information is available via the Federal Register website. Look for more information and analysis on the proposal in an upcoming issue of Healthcare Risk Management.