Hospitals give CMS their Stark law wish list

Hospitals have called on the CMS to take concrete steps to revise federal anti-kickback laws and support providers' move to value-based care, including revising what is considered a referral to giving providers protection for unintentional violations.

All in all, the CMS received over 300 comments after it asked providers this summer how it should amend the so-called Stark law. While the anti-kickback statute is meant to deter physicians from making excessive charges to Medicare and Medicaid by prohibiting financial relationships for referrals, it has long been criticized for thwarting alternative payment models and other care arrangements.

Physicians and hospitals can now be found liable even if they didn't intend to violate the Stark law, and offenses can carry significant financial penalties.

But that should change, according to Barclay Berdan, CEO of the 29-hospital Texas Health Resources system, based in Arlington. He called on the CMS to revise how it punishes providers that accidentally violate Stark law due to technical errors, including lapsed agreements and missing signatures.

Instead, the agency should determine whether Medicare, Medicaid or beneficiaries were harmed by the potential Stark law violation, he said.

"These options would also have the effect of decreasing the administrative burden of prosecuting and reviewing self-referral disclosure protocol submissions by CMS and the Office of the Inspector General," Berdan said in a Aug. 21 comment letter.

Other providers asked the CMS to revisit its definition of a referral. The Stark law's current wording has made it difficult for patients to be seen by multiple doctors within the same healthcare system, according to Tracey Stanich Witherow, director of organizational integrity and regulatory affairs at Allina Health, a 12-hospital system based in Minneapolis.

"Care coordination requires some degree of care management, and we need the ability to work together across our organization to ensure patients get the right care at the right time," Witherow said in a comment letter. "Some of our physicians' efforts to do so are considered 'referrals' under the current Stark law, even if the referral presents no risk for increased payment to our organization."

The CMS should clarify that a referral under Stark law results in an additional or increased payment from the agency to a healthcare organization, she said.

More broadly, the CMS needs to create an innovative payment exception policy to protect providers participating in value-based arrangements, according to Craig Becker, president and CEO of the Tennessee Hospital Association.

Becker proposed that any payment provided under a clinical integration arrangement should be exempt from the anti-kickback statute. The agency should also exempt incentive payments, shared-savings arrangements as well as infrastructure payments used in implementing a clinical integration arrangement, Becker said in a comment letter.

"This proposed innovative payment exception is essential to our ability to improve patient care," Becker said.

It's unclear whether the CMS will take action on any of the Stark law proposals it received, or if the changes will require congressional action.

HHS' Office of Inspector General has released its own request for information on how it can modify or add new safe harbors to the anti-kickback statute to prevent providers in value-based pay models from facing civil money penalties.