HHS' massive Stark overhaul prompts optimism for value-based care models

Doctor and patient talking and discussing health treatment while sitting at the desk. Physician pointing into tablet pc.
Hospital and doctor groups were largely optimistic with the Department of Health and Human Services' proposed overhaul of the decades-old Stark Law. (andrei_r/GettyImages)

Many of the top health system and provider groups lauded the Department of Health and Human Services’ (HHS') proposed regulations aimed at updating the decades-old Stark Law saying they believe it is the start to removing major regulatory headaches stymying the shift to value-based care models.

The Centers for Medicare & Medicaid Services (CMS) and HHS' Office of Inspector General proposed rules Wednesday introducing new safe harbors to the anti-kickback statute and reforms to the 1989 Stark Law that bans physician self-referrals. The proposed rules would create new exceptions to Stark and safe harbors to shield value-based care arrangements between doctors and healthcare facilities.

For instance, the proposed rule would require healthcare entities to provide a written document to the government that spells out the arrangements between them and indicate what patient population they are going to target and what outcomes they are going to measure. Those outcomes will be monitored to ensure the value-based arrangement doesn’t violate the law, officials said.  The proposed rule would also provide flexibility for sharing information. For example, if a cardiologist has data analytics, they currently under Stark can’t give that information to the primary care practice for free, officials said. The primary care doctor has to pay a price because it refers patients to the cardiologist.

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Some providers were enthusiastic of the proposed overhaul.

RELATED: CMS' impending overhaul of Stark Law can only go so far, experts say

“Cooperation between providers to better coordinate and manage patient care is critical to the success of value-based arrangements,” said Farzad Mostashari, M.D., CEO and founder of physician-led accountable care organization network Aledade, in a statement. “That said, it’s important that these rules safeguard against misuse by clinically integrated networks and provider groups who seek to control referral patterns and ultimately increase costs.”

The main physician lobbying group, the American Medical Association, praised the administration’s move to modernize the decades-old regulations that are “potential barriers that impede the delivery of patient-centric care.”

Hospital groups also praised the new regulations, with the American Hospital Association saying the overhaul will “help supplant numerous waivers of these same regulations needed to experiment with collaborative and innovative programs to provide cost-effective comprehensive care through new value-based models.”

The Federation of American Hospitals added that “removing legal barriers to impede care coordination will enable hospitals and doctors to work together to improve the quality and efficiency of patient care.”

But another provider group said the regulation doesn’t do enough to help practices struggling now to comply with the regulations.

RELATED: CMS seeks 'bold ideas' as it makes reducing regulatory burden of Stark Law a top priority

The Medical Group Management Association (MGMA), which represents physician groups, slammed the regulations for adding unnecessary complexity to an already complex law.

“For those fortunate medical groups that can utilize the new value-based exceptions, this proposal is a step in the right direction,” said Anders Gilberg, senior vice president for MGMA’s government affairs, in a statement. “For medical groups that have been waiting years for relief from the complexity of the Stark law, this isn’t it.”

The regulations include clarifications of several terms intended to help physician practices ascertain whether they are meeting Stark regulations.

But Gilberg said the proposal fails to “clarify fundamental issues related to group practices.” He said the rule is further evidence that Congress needs to step in and fix the law.

The group said the rules don’t address fundamental problems with Stark that include stiff penalties for minor infractions of highly technical requirements and a lack of clarity on how to structure a financial agreement between a health system and group practice.

It would take an act of Congress to change Stark’s penalty structure, but so far there has been no movement in Congress to overhaul Stark.

Both proposed rules will be open for public comment for 75 days after their publication in the Federal Register Oct. 17.

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