The CMS late last month posted on its Web site the long-awaited final regulations on Stark law prohibitions applying to financial relationships between physicians and the hospitals to which they refer patients. The document, which represents the third and final phase of the regulations, creates no new exceptions but rather makes certain refinements that could permit or, in some cases, require restructuring of some existing arrangements, according to a CMS news release. The text is slated to be published in the Federal Register Sept. 5 and become effective 90 days later, replacing the Phase 2 draft of the regulations in place since 2004. I think the industry is going to have to be paying attention because the rules are shifting, says Robert Homchick, a partner in the law firm of Davis Wright Tremaine in Seattle. Homchick and other healthcare lawyers scrutinizing the document say one hot spot in the rule is a change in what has been fairly broad leeway for indirect compensation, which referred to 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 includes a grandfather clause that allows the terms of current contracts to play out before they would have to be restructured. Another area with significant refinements attempts to clarify how hospitals are allowed to recruit physicians to relocate to their area. The section also addresses practice restrictions that physicians groups can place on the recruited doctor to protect their business if he or she decides to leave the group but stay in the area. The CMS has posted two versions of the rule. The 516-page version includes substantial background material, comments and responses. The 131-page version is a redlined take on the Phase 2 draft.
CMS regs refine physician self-referrals to hospitals
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