Executives of large health systems told Congress on Tuesday that an anti-kickback law could hinder value-based payment models.
Dr. Ronald Paulus, CEO of Mission Health system, which cares for about 900,000 patients in North Carolina every year, said his system has not launched initiatives aimed at improving quality of care for patients because those moves could result in penalties under the Stark law.
He and others on Tuesday pushed members of the Senate Finance Committee to repeal or revamp the physician self-referral law that prohibits doctors from referring Medicare patients to hospitals, labs and colleagues with whom they have financial relationships, unless they fall under certain exceptions. No intent of wrongdoing is required to prove liability, and offenses carry potential civil monetary penalties.
The committee's hearing follows the release of a Congressional white paper last month that noted that the Stark law has created “a minefield for the healthcare industry.”
Experts submitted the comments following a Senate Finance Committee and House Ways and Means roundtable late last year on the Stark Law. Many suggested expanding exceptions and waivers to Stark or repealing parts of it or the entire law.
“A total Stark repeal would not only help health systems do what we need to do, but precisely what [lawmakers] have asked us to do, which is focus on what's best for patients and transform our outdated fee-for-service system to a value-based care system,” Paulus said.
More than 75% of Mission Health's patients are Medicare or Medicaid beneficiaries. With HHS pushing to shift half of Medicare payments to value-based by 2018, Paulus is running into problems.
“We are actively trying to push our market to a value-based payment framework because it offers great promise for patient care and our local employers, Paulus said. “In the current environment, health systems cannot responsibly make the long term human and capital commitments necessary to truly align incentives for the system and physicians to truly transform care.”
If an outright repeal isn't possible, others at the hearing felt the law could be revamped.
The law's current verbiage makes it difficult for physicians to enter innovative payment arrangements as they are not susceptible to fair market value assessment, which is required under Stark, according to Peter Mancino, deputy general counsel of The Johns Hopkins Health System Corporation, which includes a not-for-profit network of 15 healthcare centers throughout Maryland.
Another issue is that the law prevents hospitals from paying providers more when they meet certain quality measures, such as reducing hospital acquired infections, while paying less to those who miss the goals.
“Therefore, we support reforming Stark to allow hospitals to make incentive payments to physicians based on the physicians' achievement of quality metrics and cost-reduction targets,” Mancino said.
Senate Finance Committee Chairman Orrin Hatch said that “If, as some have claimed, the Stark law is impeding the implementation of recently passed health reforms like the Medicare Access and CHIP Reauthorization Act and preventing better integration in the delivery of medical treatment, we should address that.”
Hatch said the committee would take some sort of action before the end of the year, but he did not indicate if it would push for a full repeal or a modification of the Stark law.
The CMS already finalized some changes to Stark last year within the Medicare physician fee schedule for 2016 that offered providers a little more flexibility when it came to technical violations of the law. But those changes didn't really address Stark within the context of the industry's move to value-based care.