In early July, the Centers for Medicare and Medicaid Services (CMS) published a notice of proposed rulemaking, amending the Physician Self-Referral Prohibitions, or Stark law. 80 Fed. Reg. 41,909-930 (July 15, 2015). The proposed rule introduces two exceptions to Stark. The first new exception, 42 C.F.R. §411.357(x), allows financial assistance to medical practices so they may be able to recruit primary care non-physician practitioners (ARNPs, PAs, etc.). The second new exception, proposed as 42 C.F.R. §411.357(y), addresses arrangements where a physician gains access to utilize another’s premises, equipment, personnel, etc. for a limited or as-needed basis.  These are referred to as ‘timeshare arrangements.’

In addition to these new exceptions, CMS proposed certain amendments to  existing regulatory exceptions. These include: 1) expanding to 90 days the grace period for the Stark signature requirement; 2) extending the six month holdover provision of certain exceptions, presuming the terms of the arrangement in question have not changed; 3) revisions to clarify that signed writings do not have to be formal agreements under Stark; and 4) under the ‘stand in the shoes’ rule, clarifying how signed writing and volume or value standards apply to direct compensation arrangements.

Most interestingly, though, CMS has solicited comments regarding the “perceived need for regulatory revisions or policy clarification regarding permissible physician compensation.” See 80 Fed. Reg. 41,926. CMS states that the changes in the nation’s health care delivery and payment systems since Stark’s enactment, and most recently with the Affordable Care Act, has drastically changed how health care practitioners provide care and seek payment for that care.  Specifically, CMS asks hard questions, such as, do the standards such as “volume or value” and “other business generated” pose barriers to reaching clinical and financial integration? Or, which exceptions apply to financial relationships created by alternative payment models? In total, there are ten areas in which CMS seeks public comment on the issue of Stark acting as an impediment to health care reform. The full text of the proposed rule and the request for public comment may be found here.

The request for comments is an opportunity for providers to voice concerns and provide a practical perspective to influence regulations that significantly affect physicians and hospitals and the development of compensation mechanisms. Stark prohibitions continue to have confounding intricacies and the new regulations will require continued scrutiny of arrangements between providers.

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