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CMS seeks public comment on potential Stark Law modifications

Thad Leach Ken Farris August 2, 2018

Centers for Medicare & Medicaid Services (CMS) recently issued a Request for Information (RFI) seeking public comments on the regulatory burdens associated with the federal physician self-referral law, commonly known as the “Stark Law.” Although the RFI has a particular focus on the Stark Law as a potential barrier to certain coordinated care models, CMS requested comments on nearly two dozen wide-ranging issues — some of which go to the core of the law’s interpretation and application. 

The broad scope of CMS’s request gives health care providers an opportunity to voice their concerns on a variety of Stark Law provisions, and may demonstrate an interest within the administration to modify the regulations implementing this statute.

The public’s comments are due by the end of the business day, Friday, August 24, 2018.

The Stark Law and care coordination

CMS explicitly stated a desire to discern the potential impact of the Stark Law on care coordination efforts as part of alternative payment models (APMs) and other integrated care arrangements. CMS extended requests concerning the law’s impact on care coordination, such as:

  • Whether existing Stark Law exceptions would cover arrangements under APMs, specifically the risk-sharing arrangement exception and physician incentive plan compensation rule within current regulations;

  • Whether any new Stark Law exceptions are needed to cover arrangements under APMs, including exceptions tailored for specific APM types such as accountable care organizations and bundled payment models; and,

  • Whether CMS should define certain terminology related to APMs.

Notably, the administration’s proposed 2019 budget includes a legislative proposal to introduce a new Stark Law exception for APM arrangements. While this proposal has not passed Congress, the proposal, coupled with this RFI, shows an apparent openness in the Trump White House to examine the impact of the Stark Law on care coordination and APM participation.

Potential broader reforms for the Stark Law

CMS also solicited comments on fundamental aspects of the Stark Law, including:

  • Whether certain key definitions should be modified, namely:
    • “fair market value”;
    • “commercial reasonableness”; and,
    • “take into account the volume or value of referrals or other business generated”;

  • Whether there are obstacles preventing providers from qualifying as a “group practice” under the current rules;

  • Whether any other definitions or exceptions require additional clarification from CMS;

  • Whether the Stark Law’s effectiveness in fraud and abuse prevention should be measured by considering the compliance costs borne by providers; and,
    Information on costs borne by providers related to the Stark Law.

These broader inquiries signal a possible interest to modify the Stark Law beyond the context of care coordination. In a statement included in the agency’s RFI announcement, CMS Administrator Seema Verna said, “Dealing with the burden of the [Stark Law] is one of our top priorities as we move toward a health care system that pays for value rather than volume.”

Soliciting comments

Health care providers interested in submitting comments to CMS may do so through August 24, 2018. Comments need not address every issue raised by CMS. Rules regarding comment submission can be found in the RFI, which may be accessed here.

If you or your company have any questions about the RFI or are interested in submitting a comment to CMS, please feel free to contact a member of Thompson Coburn’s Health Care group.

Thad Leach and Ken Farris are attorneys in Thompson Coburn’s Health Care practice.