The CMS has soothed the nerves of providers and their lawyers with its latest round of revisions to the Stark restrictions on physician self-referral, this time delivered via the 2009 inpatient prospective payment system rule, though many remain rattled by the constantly shifting regulatory terrain.
The rule, published in the Federal Register Aug. 19, modifies a controversial and convoluted notion known as stand in the shoes, which was introduced in September 2007. The change threatened to make it much harder for integrated systems and academic medical centers to structure routine mission-support payments for their affiliated physicians without violating the so-called Stark law, which regulates referrals physicians make for certain Medicare-paid services to providers in which they have a financial interest. Physicians would be seen as standing in the shoes of their physician organizations when compensation arrangements were looked at under the Stark lens.
Under the fix, effective in October, the provision applies only to physicians with an ownership or investment interest in the organization, and it wont apply if the ownership interest doesnt confer any financial benefits to the physician. Also, its not triggered if the compensation satisfies the criteria of a Stark exception carved out for academic medical centers.
The CMS had delayed implementation of stand-in-the-shoes for integrated systems and academic medical centers for one year in response to providers concerns, and in its proposed IPPS rule in April three potential fixes to the problem were floated. Those fixes were largely panned, so the CMS chose none of them and instead wrote a new one.
The American Hospital Association, in comments submitted to the agency, urged the CMS to take a step back and approach its application of the Stark law not only from the perspective of controlling abusive behavior, but also from the perspective of encouraging care improvement initiatives that would benefit patients, hospitals and physicians.
What theyve done in the final rule is take a more simplified, direct approach to addressing the question, said Lawrence Hughes, the AHAs assistant general counsel. Maureen Mudron, the AHAs deputy general counsel, added that the association is looking for a larger perspective and holistic approach so that hospitals and physicians arent trying to manage and maneuver across contradictory expectations in the rules.
Ivy Baer, director and regulatory counsel for the Association of American Medical Colleges, said the tweak to stand-in-the-shoes reflects a willingness of the regulators to listen to the associations concerns and acknowledges that academic medical centers really are a little different than everybody else, in good ways. Faculty practice plans appear to be in the clear, Baer said. Im sure if Im wrong, Ill find out.
The Federation of American Hospitals had complained that the agencys moratorium of the policy didnt extend to for-profit hospitals but is happy with the outcome. Jeff Micklos, senior vice president of business operations and general counsel for the FAH, said that the CMS staff really achieved the goal that they wanted to achieve, but also in a way thats workable for hospitals.
Also in the payment rule, the CMS followed through on its proposal to close the door on Stark leeway for leases on space or equipment that are paid according to the number of referrals from the lessor to the lessee, known as per-click arrangements, a setup popular among urologists with lithotripters. Another change widens the scope of the restrictions to reach services for which hospitals bill Medicare that are performed by physician-owned facilities, such as imaging centers. Both of those changes are effective October 2009, allowing providers time to unwind arrangements that will no longer be allowed.