Soothing Stark?

Recently, the Centers for Medicare & Medicaid Services (“CMS”) expressed an openness to relaxing current Stark Law restrictions on physician referrals. Specifically, on June 25, 2018, published a Request for Information (RFI) seeking “input from the public on how to address any undue regulatory impact and burden of the physician self-referral law.”

Passed in the late 1980s, the Stark law refers to a series of federal laws that prohibit physician self-referrals, which are referrals by a physician of a Medicare or Medicaid patient to an entity providing one of several defined designated health services (“DHS”) with which that physician (or an immediate family member) has a financial relationship, either directly or indirectly. The costs associated with violating the these highly technical and often complex business restrictions are serious and can include civil penalties, denial of payments for the services provided, civil false claims liability, including treble damages, and, more egregious circumstances, suspension or debarment from participation in Medicare, Medicaid, or any other federal health care program.

For years, healthcare providers have opposed Stark’s extensive restrictions and have called on CMS to amend the Stark Law to remove barriers from legitimate business transactions, including those that can facilitate cooperation and coordination between care providers. Indeed, many of the obstacles facing the development of new and novel financially or clinically-integrated delivery systems are rooted in at least the perception of insurmountable regulatory challenges. Supporters of the either relaxing the Stark Law itself, or perhaps expanding the exceptions and statutory safe-harbors, will open the door for broader collaboration among healthcare providers—an absolutely critical component of realizing the lofty goals associated with value-based care

Eric Hargan, Deputy Secretary of the U.S. Department of Health and Human Services, recently advocated for the removal of those barriers stating, “[r]emoving unnecessary government obstacles to care coordination is a key priority for this administration.” So while wholesale changes to the Stark Law are unlikely, the Trump Administration has at the very least indicated a willingness to consider modification to ease the challenges the law imposes on legitimate efforts to incentivize care coordination, to limit the same inefficacies and waste the Stark Law took aim at.

To that end, this week’s RFI from CMS is part of a larger effort called the “Regulatory Sprint to Coordinated Care.” This program is focused on identifying and removing regulatory barriers to coordinated care. Providers and other interested parties looking to take advantage of this process and submit comments must do so within 60 days of June 25, 2018.

The attorneys at Buttaci Leardi & Werner LLC routinely counsel clients on the application and contours of the Stark Law. This includes: structuring business transactions and contracts, including physician compensation models to comply with the Stark Law; and also counselling and defending physicians and other healthcare businesses facing regulatory scrutiny.

Posted in: Compliance, Fraud and Abuse, Healthcare Contracts, Healthcare Transactions, Regulation, Risk Management, Stark Law