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Proposed CMS changes in the Stark Law
In November 2007, the ISMA reported on new Stark III rules that became effective Dec. 4, 2007.
However, additional proposed changes, commonly known as Stark 2.5, will further affect physicians and their practices. These proposed rules, first published July 12, 2007, seek to tighten the existing Stark Law limitations on many health care ventures involving physician referral arrangements.
The Centers for Medicare & Medicaid Service (CMS) has indicated its intention to publish a final rule that will address the following:
- Tests and services furnished “Under Arrangements”:
CMS seeks now to prohibit a physician from referring to an entity in which the physician has a financial relationship – even when the entity does not bill Medicare. The proposed rule redefines “entity” to mean both the entity billing for the services and the entity performing the services.
- "In-office ancillary” services:
CMS seeks to prohibit physicians in large medical buildings from referring diagnostics in the same building when the tests are not sufficiently closely connected to the referring physician.
- Unit of service (per-click) payments in lease arrangements:
CMS is concerned that the current “per-click” rule provides an incentive for over-utilization and seeks to disallow such arrangements.
- “Set in advance” and percentage-based compensations:
CMS proposes to eliminate the exception for all percentage-based services, equipment, offices and similar items and services. However, CMS will continue to allow certain percentage-based arrangements for personally performed physician services.
- Burden of proof:
For situations when a denial of payment is appealed, CMS proposes placing the burden on the physician/entity seeking payment, not the Medicare contractor denying the claim.
- Obstetrical malpractice insurance subsidies:
CMS seeks to amend the exception for obstetrical malpractice insurance to make obstetrical care more available.
- The period of disallowance for noncompliant financial relationships:
CMS is considering ways to institute a period of disallowance when the entity receiving a referral cannot bill for services pursuant to that referral because the arrangement is implicated but not under a Stark exception.
- Owner or investment interests in retirement plans:
CMS seeks to narrow the exception for retirement plans to prevent physicians from purchasing interests in other (non-employer) entities through their retirement plans.
- Alternative criteria for satisfying certain exceptions:
CMS is considering providing an alternative method for satisfying an exception when certain violations of Stark Law are caused by some “innocent and trivial” procedural violations.
CMS officials have not indicated when they expect these rules to be finalized.
CMS has separately finalized certain anti-markup provisions effective Jan. 1, 2008, while others have been delayed until Jan. 1, 2009. See the article below.
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