CMS Issues Stark Rule Final Update
The Centers for Medicare and Medicaid Services (CMS) issued final rules governing physician self-referrals under the so-called Stark law and final rules under the federal anti-kickback statute on November 20, 2020. The Stark law was enacted to prevent physicians from profiting from referrals to other providers when physicians or their immediate family members had financial relationships with them. The federal anti-kickback statute generally prohibits providers from offering to give or actually giving anything to induce referrals.
The final rules are generally designed to give providers more flexibility to participate in value-based arrangements and to coordinate and manage patient care through reductions in potential liability and administrative work in exchange for taking on risk. The more risk providers are willing to accept, the more flexibility they will have under new exceptions to both statutes. Providers and their partners will be able to join forces to achieve specific value-based goals for target populations through so-called value-based enterprises.
Hospitals and other institutional providers may, for example, team up with home care providers to provide services to patients after they are discharged to improve outcomes and prevent readmissions. Under the new rules, providers may share data analytics programs to track patients as they move from one level of care to another. They may also, for example, give electronic health record (EHR) software and cybersecurity technology to physician practices.
A key goal of activities permitted under revised rules is to innovate and produce value, so long as activities do not significantly increase the risk for fraud. Providers in value-based partnerships will be required to document the activities of each value-based initiative and identify who is in charge of making sure the enterprise is on track to achieve goals. If goals are not being met, participating providers may be required to discontinue activities. Documentation of activities in provider-based enterprises will be reviewed by enforcers.
Less stringent standards for personal services and management contracts may prove particularly useful to providers of all types. Care coordination across the entire spectrum of care may also prove more viable under the new rules, along with free transportation for patients.
A key issue is whether longstanding Stark and anti-kickback requirements were a significant barrier to value-based arrangements or whether the real hurdle for providers is aversion to risk. The new rules will take effect on January 19, 2021.
Providers may have envisioned that revisions to the Stark and anti-kickback regulations would be so extensive that they would effectively be “gutted.” Providers who envisioned this result will be very disappointed by the revised rules. At the same time, the new rules offer opportunities for providers to partner with each other to accomplish outcomes that may have been difficult to pursue under current requirements.
Elizabeth E. Hogue, Esq.
Elizabeth E. Hogue, Esq.
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