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HHS Delivers Long-Awaited Stark Law Regulatory Overhaul

Analysis  |  By Steven Porter  
   October 09, 2019

The two proposed rules from HHS OIG and CMS aim to make it easier to provide value-based care without running afoul of self-referral and anti-kickback laws.

With a pair of proposed regulations, the U.S. Department of Health and Human Services delivered a highly anticipated overhaul Wednesday of the regulations that interpret the Stark Law and federal Anti-Kickback Statute.

The proposals—which were released by the HHS Office of Inspector General and the Centers for Medicare & Medicaid Services, respectively—aim to make it easier for healthcare providers to coordinate care and offer value-based arrangements, according to HHS officials. The duo of proposals would both reduce the burden of compliance and maintain strong safeguards against fraud and abuse, the department said.

HHS Secretary Alex Azar said government regulations have too often blocked physicians from providing affordable and personalized care.

"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," Azar said in a statement praising President Donald Trump's commitment to regulatory reform.

HHS Deputy Secretary Eric Hargan called the proposed rules "a historic reform."

"They are part of a much broader effort to update, reform, and cut back our regulations to allow innovation toward a more affordable, higher quality, value-based healthcare system, while maintaining the important protections patients need," Hargan said in the statement.

Hargan said in January that HHS was in the final stages of updating the regulatory framework around the physician self-referral and anti-kickback laws, and CMS Administrator Seema Verma said in May that she hoped the update would come by the end of this year, in response to providers' calls for greater flexibility.

"We serve patients poorly when government regulations gather dust in the attic: they become ever more stale and liable to wreak havoc throughout the healthcare system," Verma said in the statement.

Administrative costs are pushing overall healthcare costs higher, but the Stark overhaul will help to bring those administrative costs down, she said.

The CMS proposal would create new and permanent exceptions to the 30-year-old Stark Law for value-based arrangements, permitting physicians and other providers to try innovating solutions without fear that their legitimate efforts to coordinate care might violate the law, according to an agency fact sheet. Those new exceptions would apply for Medicare and non-Medicare populations alike.

The HHS OIG proposal would create three new safe harbors for certain forms of remuneration among eligible participants in value-based arrangements and make other changes, according to an OIG fact sheet.

Both CMS and OIG are soliciting public comments on the details of their proposals and related matters.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.

Photo credit: The homepage of the official website for the United States Department of Health and Human Services. (Editorial credit: chrisdorney /


The proposals would create permanent Stark Law exceptions and anti-kickback safe harbors.

The deregulatory effort should unleash innovation among healthcare providers, officials say.

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