After years of provider feedback, this month CMS provided another indication that potentially significant modifications to the Stark Law are looming.

Speaking at the Federation of American Hospitals’ 2019 Public Policy Conference, CMS Administrator Seema Verma noted that the agency plans to issue updated regulations at some point in 2019. Verma noted that the updated regulations will seek to spur care coordination in an era of increasing use of value-based payment models. She noted that Congress passed the Stark Law at a time when fee-for-service payment arrangements were prevalent, and such a regulatory model may not be as appropriate today as providers accept more risk for cost and outcomes.

Verma’s comments follow CMS’s 2018 request for information (RFI) concerning Stark Law updates and serve as another expression of CMS’s willingness to modify the current regulatory environment. The potential regulatory modifications mentioned by Verma reflect many of the concerns and proposals raised by commenters to the 2018 RFI (discussed in a previous Health Law Checkup post). Some of these shared concerns include:

  • The need for updates to reflect the shift toward value-based payments with many commenters suggesting CMS create a new exception for value-based payment arrangements;
  • Desired clarifications to key definitions in the Stark Law, including:
    • “fair market value”
    • “commercial reasonableness,” and
    • “take into account the volume or value of referrals or other business generated”;
  • A desire for an approach to address “technical” noncompliance with the Stark Law such as missing signatures or incorrect dates; and
  • The need to modernize the regulations to account for cybersecurity and electronic health record requirements.

Exact details on the extent and timing of potential modifications remain unknown. Thompson Coburn will continue to monitor developments related to the Stark Law.