The CMS has posted to its Web site the long and anxiously awaited final rule that interprets the Stark law prohibitions and exceptions governing referrals that physicians make to entities in which they have a financial stake. In general, in response to public comments, in this Phase 3 final rule, we have reduced the regulatory burden on the healthcare industry, the CMS concludes in its summary. The Phase 2 draft of the rule has been in effect since 2004.
Healthcare lawyers scrutinized the 516-page document as soon as it appeared this afternoon. One hot spot is the fate of what for six years has been a fairly broad exception for indirect compensation, which protects arrangements in which payment flows to a professional corporation rather than directly to physicians. That affects a lot of contracts, said Gerald Griffith, a partner in the Chicago office of Jones Day.
Under Phase 3, many arrangements that used to be considered indirect will be looked at as direct, making it much more difficult to structure them as safe under Stark. The section pertaining to indirect compensation includes a grandfather clause that allows the terms of current contracts to play out before they would have to be restructured, he noted as he trolled the pages during an interview.
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