Reforming the Stark Law

You may have heard of the long-standing Medicare “Stark Law” which prohibits a physician from self-referring (i.e. making referrals for services if the physician or an immediate family member has a financial relationship with the entity performing the service.)

Many in the healthcare field, including ACEP, feel the law, which went into effect 30 years ago, is outdated and impedes efforts to move toward value-based care. The regs implementing the law have not been revised to reflect changes in the way physicians now practice medicine…until now.

Recently, the Department of Health and Human Services (HHS) issued proposed regs modifying the Stark Law and the associated anti-kickback statute, which assigns criminal penalties to providers who knowingly pay or receive payment for referrals of services. HHS had been looking at how to update these regs for some time and had even issued a request for information (RFI) which ACEP responded to in August 2018.

The main impetus for these reg proposals is to help encourage new value-based arrangements in health care. Many commenters who responded to the RFI, including ACEP, stated that the Stark Law is a roadblock to value-based care, since it creates confusion about whether some care coordination activities are legally permissible. For example, if you join with another provider group or hospital to participate in an alternative payment model (APM), it may be unclear whether the Stark Law would limit your ability to refer services to other members of your newly-formed entity. The purpose of an APM is to improve quality and reduce costs by better coordinating care. However, if you don’t have the flexibility to refer services to the most appropriate providers, it makes it nearly impossible to achieve that goal.

HHS appears to have heard these comments loud and clear and is proposing new, permanent exceptions to the Stark Law and new safe harbors to the anti-kickback statute for value-based arrangements to ease providers’ concerns that appropriate care coordination and quality-improvement activities would violate federal laws.

While ACEP supports the intent of the proposed regs, we are still reviewing the details to see how the changes would impact emergency medicine. One key aspect of our response, which is due at the end of 2019, will be to highlight the current gap in APMs and how that also impedes efforts to embrace value-based care in emergency medicine. Any reform HHS makes to the Stark Law will be moot if emergency physicians don’t have an APM in which to participate.

As noted in a previous post, ACEP is working on an initiative to promote participation in emergency medicine-focused APMs. Hopefully, the changes to the Stark Law will come in handy if our initiative is successful!

Until next week, this is Jeffrey saying, enjoy reading regs with your eggs!