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CMS Finalizes Stark Law Overhaul, AEH Praises Changes

Analysis  |  By Jack O'Brien  
   November 20, 2020

The final rule on Stark Law has an effective date 60 days following publication in the Federal Register.

The Centers for Medicare & Medicaid Services (CMS) announced changes to the Physician Self-Referral Law, also known as "Stark Law," on Friday afternoon.

According to the agency, the final rule includes several policies originally proposed during the rulemaking period in October 2019, including "permanent exceptions for value-based arrangements" and protection for "non-abusive, beneficial arrangements."

Additionally, the final rule has additional guidance on "key requirements of the exceptions to the physician self-referral law" and reduces administrative burdens that "drive up costs" by redirecting them to patient care.

Related: HHS Delays Stark Law Reforms One Year

"When we kicked off our Patients Over Paperwork initiative in 2017, we heard repeatedly from front-line providers that our outdated Stark regulations saddled them with costly administrative burden and hindered value-based payment arrangements," CMS Administrator Seema Verma said in a statement. "That sound you hear is the mingled cheers and exclamations of relief from doctors and other health care professionals across the county as we lift the weight of our punishing bureaucracy from their backs."

The final rule has an effective date 60 days following publication in the Federal Register, with the exception of one provision which takes effect on January 1, 2022.

The announcement came the same day that the Trump administration unveiled policies to address prescription drug pricing, including a final rule to eliminate the current system of rebates for prescription drugs under Medicare Part D, an interim final rule for the "Most Favored Nation Model," and ceasing the Unapproved Drugs Initiative.

Related: Trump Unveils Sweeping Reforms to Lower Drug Prices

Following the announcement, America's Essential Hospitals (AEH) issued a statement praising CMS' actions.

Beth Feldpush, DrPH, senior vice president of policy and advocacy at AEH, commended the Trump administration's steps to modernize Stark Law with "new, permanent safe harbor protections and exceptions that support care coordination and value-based arrangements."

"Outdated fraud and abuse laws and regulations have limited essential hospitals’ efforts to align incentives to expand access, improve care, and preserve scarce resources within and beyond their systems," Feldpush said in a statement. "Further, these changes provide broad definitions to allow patient engagement and support that target social determinants of health affecting the communities essential hospitals serve, such as safe housing and transportation needs."

Related: What Can We Expect from Stark, Anti-Kickback Revisions?

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

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