CMS Administrator Predicts Changes to Stark Law Will Improve Value-Based Care

March 2019 ~

On March 4th, at the Federation of American Hospitals conference, CMS Administrator Seema Verma said the upcoming changes to the Stark law have been designed to restrict self-referrals in health care and will simplify participation in value-based care arrangements.

The update comes in response to industry comments, requested in June of last year, which claimed significant changes are needed in order to facilitate a successful transition to value-based care. Hospitals and physicians, in favor of the Stark Law update, have also been vocal in their concerns over the potential of violating the law when referring patients to a hospital or laboratory they have a financially connected to and could prevent them from participating in value-based arrangements.

CMS agreed with the comments and concerns, said Verma. “Most of the commenters we heard from believed that regulatory changes are needed to support the move to where we want to be on value-based payments. But, of course, there was also recognition—a recognition that we share—that the potential for program integrity vulnerability or other abuses continues to be a significant threat that cannot be ignored.”

Verma noted, in her speech, that when the Stark Law was passed in 1989, it made sense in a fee-for-service context, then went on to say, “But in a system where we’re transitioning and trying to pay for value, where the provider is ideally taking on some risk for outcomes and cost overruns, we don’t have nearly as much of a need to interfere with who’s getting paid for what service.”

The planned changes will include “clarifying the regulatory definitions of volume or value, commercial reasonableness and fair market value; addressing issues such as lack of signature, incorrect dates or other areas of technical noncompliance; and updating the regulation to address a world in which there are cybersecurity and electronic health records requirements,” according to Verma, continuing, “This will represent the most significant changes to the Stark Law since its inception, and it’s our hope these changes will help spur better care coordination and help support our work to remove barriers to innovation while continuing to provide appropriate safeguards for our programs”.

Source(s): CMS Press Release March 4, 2019; Modern Healthcare; FierceHealthcare; Becker’s Hospital Review; KHN Morning Briefing; Health Data Management;