October 24, 2021

Volume XI, Number 297

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October 22, 2021

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CMS “Goes Fishing” on Stark Law’s Impediments to Value-Based, Coordinated Care

On June 20, 2018, the Centers for Medicare & Medicaid Services and Department of Health and Human Services issued a “request for information” (RFI) seeking input on strategies to reduce the burden of the federal physician self-referral law or “Stark Law,” including the law’s impact on the transition to value-based care.   In the RFI, CMS solicits information on the ways in which the Stark Law creates challenges for coordinated, value-based care and the transition to alternative payment and delivery models; it also seeks ideas and input on how the Stark Law may be changed to facilitate these models.

The RFI is launched as part of the agency’s “Regulatory Sprint to Coordinated Care” led by HHS Deputy Secretary Eric Hargan, which is directed at addressing regulatory barriers to coordinated care.  As such, the Regulatory Sprint and the RFI represent the administration’s efforts to reduce regulatory burden, while also demonstrating a commitment to the transition to more value-based, coordinated care and risk-based payment.  In public statements, HHS and CMS officials have suggested that the Regulatory Sprint may support similar flexibility in other laws, including the Anti-Kickback Statute. 

Although the agency does not commit to any specific regulatory changes in this document, it is notable that HHS issued a similar RFI in 2010 just before it issued sweeping waivers of the Stark Law and Anti-Kickback Statute for the Medicare Shared Savings Program.  While many of the questions focus on “Alternative Payment Models” under the Quality Payment Program, the RFI is not limited to these programs.  Instead, the RFI invites the public to propose new exceptions and revised interpretations of the statute to advance the goals of coordinated care. 

In the RFI, CMS poses twenty specific questions related to the Stark Law, Alternative Payment Arrangements, and delivery system innovation strategies. The topics and questions range from:

  • Requests for details on Alternative Payment Models and innovations considered or engaged in by health care delivery system participants, including details on the financial and operational details of the arrangements, such as financial risk; 

  • Solicitation of ideas and input on additional and/or new exceptions to the Stark Law that would facilitate existing and innovative arrangements; 

  • Thoughts on changes to existing provisions of the final rule implementing the Stark Law, such as definitions of “commercial reasonableness” and “fair market value;” and thoughts on other potential definitions and terms such as “Alternative Payment Model;” clinical and financial integration and others; 

  • Comments on key concepts in the existing law including compensation formulas that do and do not take into account the volume or value of referrals or other business within the meaning of the Stark Law and other novel financial arrangements; and

  • Requests for information on the Stark Law’s compliance cost, the potential role of increased transparency to promote compliance and how CMS should assess the Stark Law’s effectiveness in achieving its underling policy goals related to improper financial incentives. 

The RFI may represent an important opportunity for the health care industry to educate CMS on current experiences and challenges, and to shape the content of future rules implementing changes to the Stark Law, particularly in a time of industry integration across the continuum of care.  The RFI also offers tangible evidence of the administration’s commitment to continue a migration to value-based care, and potentially reflects an enhanced commitment and desire to migrate away from fee-for-service payment to arrangements involving financial risk. 

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume VIII, Number 172
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About this Author

Bruce Johnson, Health Care Organization Attorney, Polsinelli Law FIrm
Shareholder

Bruce Johnson assists clients with a strategic, forward-thinking and pragmatic approach. He brings more than 25 years of legal and management consulting experience to his health care organization clients. Bruce assists hospitals, medical groups, academic practice plans and other health care enterprises in crafting effective relationships to promote business objectives while taking into account strategic, compensation, business operations, compliance, and other issues in today’s changing payment and delivery environments.

303.583.8203
Shareholder

Janice Anderson offers a unique perspective to health care clients that is based on her extensive clinical and health care operational background (including serving on the senior executive team for a large regional health system for 14 years). She focuses her practice on corporate health care and transactional law, as well as mergers and acquisitions, hospital/physician and other joint ventures, physician relationships and contracting, and compliance.

Her areas of emphasis include:

 

  • ...
312-873-3623
Marissa Urban, Fraud, Health Care, Polsinelli Law Firm
Associate

Marissa Urban assists clients with a business-minded and practical approach. Marissa applies experience in fraud and abuse, mergers and acquisitions, regulatory compliance, and Federal Health Care Programs to promote client business objectives and legal compliance. Her years of experience in the pharmaceutical industry representing pharmaceutical manufacturers, pharmacy benefits managers, and pharmacies in strategic business development, mergers and acquisitions, and regulatory compliance provide experience-based insight for all types of health care entities. Marissa assists pharmacy...

303.256.2750
Neal Shah, Polsinelli Law Firm, Healthcare Law Attorney
Associate

Neal Shah applies his experience in government, private practice, and health care delivery to help identify practical legal solutions to complex regulatory and transactional problems, including:

  • Helping clients comply with the Stark Law, Anti-Kickback Statute, and similar federal and state fraud and abuse laws
  • Establishing and operating Accountable Care Organizations and other coordinated care arrangements
  • Completing self-disclosures of over payments of fraud and abuse liability, including through the CMS Voluntary Self-Referral Disclosure Protocol (SRDP) and...
312-463-6233
Gabriel Scott, Polsinelli Law Firm, Raleigh, Health Care Law Attorney
Associate

Gabriel Scott has a deep understanding of the evolving health care regulatory environment and the changes occurring at both the national and state levels. Prior to joining Polsinelli, Gabriel spent several years in federal civil service and the private industry. His experience, with both payor and provider sides, allows him to offer a unique perspective to clients’ regulatory and transactional challenges. Gabriel previously worked at the Centers for Medicare and Medicaid Services (CMS), first in the Center for Medicare & Medicaid Innovation (CMMI) and later in the...

919-835-3403
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