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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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On October 9, 2019, the Centers for Medicare &amp; Medicaid Services (CMS) issued long-awaited proposed changes to the Stark Law regulations as part of the Department of Health &amp; Human Services’ Regulatory Sprint to Coordinated Care initiative. This initiative seeks to promote value-based care by examining federal regulations that impede providers’ efforts to deliver better coordinated care to patients. Accordingly, the proposed rules offer greater certainty for health care providers participating in value-based arrangements and providing coordinated care for patients. They also modernize and clarify the existing Stark Law regulations. The changes were largely based on feedback CMS received to its Request for Information issued in June 2019, as well as observations gleaned from submissions under the CMS Self-Disclosure Protocol. The changes are extensive and impact a variety of financial arrangements between physicians and entities that provide designated health services (DHS). CMS solicited feedback on many of the proposed rules, so the final rules likely will differ from the proposed rules in many respects. Notwithstanding this likelihood, CMS’s guidance regarding its interpretation of the existing Stark Law regulations will be immediately helpful for providers participating in federal health care programs.

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The Office of Inspector General (OIG) concurrently issued new proposed safe harbors to the Anti-Kickback Statute and Civil Monetary Penalties Law that align in many respects with CMS’s proposals. This alert summarizes the highlights of CMS’s proposed changes to the Stark Law regulations.

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Three new exceptions are intended to accommodate the health care industry’s shift from a volume-based payment and delivery model to a value-based payment and delivery model by allowing two or more health care providers to coordinate to achieve a value-based purpose. Value-based purposes include:

Due to the disincentives for overutilization and stinting on patient care inherent in volume-based payment models, CMS is not proposing to include the standard Stark Law requirements that the compensation be fair market value and not take into account the volume or value of a physician’s referrals or other business generated by the physician for DHS entities.

The new rules proposed by CMS would also:

Comments on the proposed rules are due on December 31, 2019. The proposed rules are not effective, and may not be relied on, until finalized by CMS.

While the Stark Law regulations will continue to be technical, the proposed rules offer some relief from uncertainty, as well as new opportunities for collaboration among health care providers to deliver better, more cost-effective care to patients.

Cori R. Haper 937.443.6856 <a href="mailto:Cori.Haper@ThompsonHine.com">Cori.Haper@ThompsonHine.com</a>

Rebeccah C. Raines 937.443.6806 <a href="mailto:Rebeccah.Raines@ThompsonHine.com">Rebeccah.Raines@ThompsonHine.com</a>

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

This document may be considered attorney advertising in some jurisdictions.

https://admin.thompsonhine.com/wp-content/uploads/2022/04/Health_Care_Law_Update_-_New_Stark_Law_Rules_Proposed.pdf

New Stark Law Rules Proposed

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