Out of nearly 400 comments spanning 3,700 pages, many commenters suggested adding an exception to the law for APMs while others wanted to add provisions that would allow for more use of coordinated care.
This article first appeared December 10, 2018 on Medpage Today.
By Joyce Frieden
WASHINGTON -- Getting an exception for value-based payment arrangements put into the Stark self-referral law is one of the most important issues to providers in implementing these new systems, experts said here.
The 1989 law, named after former congressman 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," the Centers for Medicare & Medicaid (CMS) notes on its website.
Designated health services include clinical lab services, physical therapy, occupational therapy, radiology, durable medical equipment, home health services, outpatient prescription drugs, and inpatient and outpatient hospital services.
In July, CMS administrator Seema Verma said that her agency hoped to issue a proposed regulation by the end of the year to loosen the Stark rule. "One of the barriers around [promoting] value-based care is burdensome regulations, and that's where Stark comes into it," Verma said at a briefing sponsored by the Alliance for Health Policy and APCO Worldwide, a public relations firm here. "We are going to do something on Stark -- I'm very certain about that -- and we hope to have something out by the end of the year."
In September, witnesses at a House hearing testified that the law was getting in the way of forming accountable care organizations and other alternative payment models (APMs).
CMS issued a request for information, asking stakeholders to send suggestions for how the law should be changed. Out of nearly 400 comments spanning 3,700 pages, many commenters suggested adding an exception to the law for APMs while others wanted to add provisions to the current exceptions that would allow for more use of coordinated care, Chip Hutzler, JD, a partner at HealthCare Appraisals of Boca Raton, Florida, a firm that appraises the value of provider payment arrangements, said Monday at a meeting for the American Bar Association health law section.
"It's very hard to fit APMs into existing exceptions easily," Hutzler said. "In some cases, they're also asking to modify existing exceptions, but they recognize that's sometimes harder to get [to], when you've got existing exceptions [that are] statutory... They may be difficult to modify." Most of the suggestions "had the same tenor of [saying that] if it's a value-based arrangement involving risk-sharing of some kind, and involving payment for quality, efficiency, and cost savings... and involving physicians and maybe designated health service entities together, collaborating, they want to fit that into some sort of new exception."
One problem with trying to improve the Stark is that "you've got a conflicting set of regulatory priorities out there," he continued. "On the one hand, Stark tries very hard to isolate treatment decisions, medical decisions from financial considerations. But all the value-based initiatives we've been talking about over the last decade -- SSP [Shared Savings Plans], MACRA [the Medicare and CHIP Reauthorization Act physician payment provisions], CJR [the Comprehensive Care for Joint Replacement payment model] -- those all try to integrate financial considerations with treatment decisions, and those two concepts conflict. So you can't have it both ways with certain things you do... That's the problem you face with the Stark law; it's not set up to handle all these value-based initiatives very well."
Other comments focused on the issue of determining "fair market value" when making compensation arrangements for healthcare providers, including the volume and value of referrals. "Does the method of compensation impact the fair market value? I think it does in some cases," said Hutzler. "Some compensation situations are riskier than others and may warrant additional pay as a result of that... It's hard to de-couple entirely volume and value from fair market value, but we can certainly try."
There were also a lot of comments on the definition of group practice, which is part of another exception in the Stark law. "This is a major area where [practices] can get additional money... So people often want to change the group practice definition -- because it's very hard to meet -- so more groups could fit into it," said Hutzler. "So there were a lot of comments around the group practice definition."
After requesting these comments, "will CMS do anything?" Hutzler said. "I expect they will... but no guarantee on that... The timing on this is the most uncertain element of it." Matthew Edgar, a technical adviser to CMS on the issue who also spoke at the event, was circumspect on the issue. "Unfortunately there's nothing I can say about that, but we did request comments and those were not just for personal edification."