CMS, OIG release long-awaited Stark Law overhaul

Seema Verma
CMS Administrator Seema Verma has hinted that a proposed regulation to overhaul the Stark Law could come this year. (HIMSS)

The healthcare industry is exploring the impact of the Trump administration's massive overhaul to the Stark Law, a 1989 act that forbids physician self-referrals or referrals to an entity they have a financial stake in.

Providers have said that the law has had a chilling effect on value-based care, as physicians may be scared to enter into value-based care arrangements with healthcare facilities.

A proposed rule released by the Centers for Medicare & Medicaid Services and the Office of the Inspector General aims to ease the regulatory worries by creating new exceptions to Stark and safe harbors from the anti-kickback statute.

The proposed rules also offer new exceptions and safe harbors to ensure that hospitals can donate cybersecurity software to doctors and not run afoul of the law. 

Now that the long-awaited proposals are out, providers are searching for the impact. Provider groups were largely optimistic about the two rules, which are both open for public comment until Dec. 31. 

However, some legal experts question how much power CMS has to reform the program. The most likely regulation from the agency will be to make broader exceptions that providers can use to escape penalties under the law.

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

CMS can’t change the type of penalties levied on offenders, which can be a major deterrent for providers. It will need Congress to do that, and so far their plate appears to be full this year.

CMS, OIG release long-awaited Stark Law overhaul

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