This is the first major update to rules for the Stark law since 1989, according to HHS. An HHS press statement explained that the new rules would give providers in value-based arrangements “greater certainty” and “ease the compliance burden for healthcare providers across the industry,” while maintaining protections against fraud and abuse.

Clinicians and hospital groups have argued that the Stark Law hampers value-based payment arrangements and makes coordinating patient care more difficult. When the law was enacted, most of the healthcare system relied on fee-for-service payments.

HHS Secretary Alex Azar said in a statement. “Our proposed rules would be an unprecedented opportunity for providers to work together to deliver the kind of high-value, coordinated care that patients deserve.”

Examples of Change: 9 Things To Know

HHS offered specific examples of the types of care coordination, patient engagement and data sharing practices that would be encouraged under the draft proposals.

  1. The proposed rule enables hospitals to provide patients with remote monitoring technology to alert physicians and caregivers when he or she needs help; and permit physicians to give patients free “smart pillboxes” which let the physicians and caregivers know when a patient misses a dose. And, would allow specialty physicians to share data analytics services with a primary care physician’s practice;
  2. Patient engagement and support arrangements are covered by the proposed safe harbors, and could include using a home health aide to help patients with medication or medical devices.
  3. The safe harbors include allowing hospitals to pay physicians incentives as part of CMS-sponsored care models; care coordination activities to increase quality, outcomes or efficiency; and value-based care relationships with significant downside risk.
  4. The new rule allows a nephrologist or dialysis facility to give patients technology that provides “two-way, real-time interactive communication” with physicians.
  5. Specialty physician practices could share patient information with primary-care physicians to manage care or work with hospitals on discharges using data analytics.
  6. The safe harbor proposals would also create more flexibility for outcome-based payments and part-time provider relationships, and ease local transportation restrictions for rural areas and discharged patients. They would also codify existing remuneration exceptions for the Medicare Shared Savings Program.
  7. The proposed rule would also allow a local hospital to enhance its own cybersecurity by providing physician practices that refer patients to that hospital with free cybersecurity software. “The hospital and the physicians often share information about their patients, so it is important that there are no weak links that might compromise everyone else,” the HHS statement explained.
  8. Proposed rules would increase flexibility, innovation and coordinated care through outcome-based payment arrangements. See fact sheet.
  9. CMS is soliciting comments regarding price transparency in relation to the Stark Law, around “whether to require cost-of-care information at the point of a referral for an item or service,” the agency noted

The American Hospital Association  (AHA) celebrated the new rules as long overdue.

“Despite widespread agreement by Congress, and even previous administrations, that these regulations needed to be modernized, the proposal is the first major step toward achieving that goal,” said Rick Pollack, president and CEO of AHA.

“The changes proposed should help to supplant numerous waivers of these same regulations needed to experiment with collaborative and innovative programs to provide cost-effective comprehensive care through new value-based models, such as Accountable Care Organizations (ACOs). And, they do so without sacrificing the law’s original purpose — to prevent physicians from referring patients to facilities in which they have a financial stake.”

Stark Law Background

The 1989 Stark Law, named for former Rep. Fortney H. “Pete” Stark (D-Calif.), “prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership, investment, or compensation), unless an exception applies,” CMS notes on their website.

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