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CMS Announces One-Year Delay in Finalizing Highly Anticipated Stark Law Reform

On Wednesday, August 26th, the Centers for Medicare & Medicaid Services (CMS) issued a notice extending the deadline to finalize significant proposed changes to the Physician Self-Referral Law (commonly known as the Stark Law) that were announced last year.  CMS published the proposed rule on October 17, 2019, in tandem with a companion proposed rule issued by Department of Health and Human Services (HHS) Office of Inspector General (OIG) with equally sweeping changes to the Anti-Kickback Statute (AKS). Both rules were issued as part of CMS’s Regulatory Sprint to Coordinated Care and offer a number of industry-friendly changes designed to reduce regulatory burden associated with the Stark Law and the AKS and allow for increased adoption of value-based arrangements.

Industry stakeholders have been pressing HHS to issue both long-awaited final rules.  Although CMS announced on June 30, 2020, that it would issue the final rule in August 2020, CMS is pushing the timeframe for finalizing the CMS rule until August 2021.  The OIG has not announced a similar extension for its proposed rule on the AKS. It is unclear whether the OIG must issue a similar extension notice, but there is speculation that OIG may also be delaying finalizing changes to the AKS.

Overview of CMS’s Proposed Changes to the Stark Law

CMS’s proposed rule includes sweeping changes and clarifications to the Stark Law welcomed by health care providers. CMS proposed new value-based enterprise Stark Law exceptions, as well as a number of modifications to existing exceptions frequently relied upon by health care providers, including the rental of office space and rental equipment exception and the fair market value exception. Additionally, the proposed rule includes a number of proposed changes to several key requirements that appear in numerous Stark Law exceptions, including the volume or value standard, the referral requirement, the AKS compliance requirement, and the writing and signature requirements. Please see our prior blog post for an overview of CMS’s proposed changes to the Stark Law.

©1994-2021 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume X, Number 240
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About this Author

Karen Lovitch Mintz DC Health Care Compliance, Fraud & Abuse, and Regulatory Counseling Medicare, Medicaid & Commercial Coverage & Reimbursement Health Care Transactions Health Care Transactional Due Diligence Health Care Enforcement & Investigations
Member

Karen focuses her practice on representing health care companies in regulatory, transactional, and operational matters. She has a substantial health care regulatory background and advises clients on matters pertaining to the federal anti-kickback statute, the Stark law, state statutes prohibiting kickbacks and self-referrals, the Clinical Laboratory Improvement Amendments of 1988, and the federal Physician Payments Sunshine Act. Karen often applies her strategic insight on these matters to counsel companies on regulatory issues arising in connection with mergers and acquisitions and other...

202-434-7324
Rachel Yount Healthcare Attorney Mintz Levin
Associate

Rachel focuses her practice on health care industry transactions.  

Prior to joining Mintz, Rachel was a health care associate in the Washington, DC office of an Am Law 200 law firm, where she represented long-term care clients in complex multistate transactions; helped health systems structure financial arrangements with referral sources; advised pharmaceutical manufacturers and pharmacy benefit managers on state laws affecting drug pricing transparency; and counseled clients on compliance with the Anti-Kickback Statute, Stark Law, False Claims Act, Medicare billing and...

202.434.7427
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