Verma promises hospital industry 'significant' Stark Law changes later this year

At the Federation of American Hospitals conference on Monday, Centers for Medicare & Medicaid Services Administrator Seema Verma said the agency is looking to bring the anti-self referral law into the context of today's health challenges. (HIMSS)

WASHINGTON—The Trump Administration plans to make a major update to the Stark Law later this year, including changes that will address cybersecurity and electronic health records requirements.

At the Federation of American Hospitals conference on Monday, Centers for Medicare & Medicaid Services Administrator Seema Verma said the agency is looking to bring the anti-self referral law into the context of today's health challenges. 

"This will represent the most significant changes to the Stark Law since its inception, and it's our hope these changes will help spur better care coordination and help support our work to remove barriers to innovation while continuing to provide appropriate safeguards for our programs," Verma told the gathering of industry leaders.

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That includes changes such as clarifying regulatory definitions for volume, value, commercial reasonableness and fair market value as well as addressing areas of technical noncompliance such as lack of signature or incorrect dates, Verma said. 

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The changes are in response to comments received from the industry last year saying the changes would be necessary in order for a transition to value-based care to be successful, but the agency also recognizes that program integrity and abuse "continues to be a significant threat we can't ignore. "

When the Stark Law was passed in 1989, it made sense in a fee-for-service context, she said.

"But in a system where we're transitioning and trying to pay for value, where the provider is ideally taking on some risk for outcomes and cost overruns, we don't have nearly as much of a need to interfere with who's getting paid for what service," she said.  

Price transparency and Hospital Compare

Verma also touched on some unpopular topics in the industry, including its role in creating price transparency and the federal Hospital Compare website. 

RELATED: Seema Verma says proposed information blocking rules with 2020 deadlines 'realistic'

"I believe a key reason healthcare costs continue to skyrocket is the fact that healthcare prices are largely hidden from patients," Verma said, pointing to new rules that went into effect in January requiring hospitals to post list prices online.

"Simply put, hidden pricing means healthcare providers don't have to compete on cost," she said. "Transparency creates competition and competition keeps prices down because patients can shop."

She recognized the complexity of creating price transparency under the current system, including addressing related problems like “surprise billing.” 

"There's no reason hospitals have to wait for the government to make this happen. You can and should go above and beyond the basic requirements," Verma said. “My hope you will see price transparency and interoperability as marketing opportunities, not a competitive disadvantage.”

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