Over the past three years, the Centers for Medicare & Medicaid Services (CMS) has sharpened its focus on enforcing Stark Law, culminating in a historic settlement of $12.56 million for Stark Law voluntary self-referral disclosures in 2023. Here’s a detailed look at the top 10 significant updates since 2021 that are reshaping healthcare compliance:
1. Emergency Response Waivers
In June 2023, CMS granted a retroactive waiver for physician owners of independent freestanding emergency departments that catered to Medicare patients during the COVID-19 pandemic. This marks the first modification of Stark Law waivers since 2020, offering protections similar to those provided to Ambulatory Surgical Centers (ASCs) during the healthcare crisis. The waiver targets departments that maintained consistent ownership and met Medicare participation requirements throughout the public health emergency.
2. Florida’s Supervision Legislation
Florida made a pivotal legislative change in June, removing the direct supervision requirement for Stark Law compliance. This adjustment allows for services to be performed under Medicare’s less stringent supervision standards, broadening the scope for how and where imaging and other procedures can be conducted, thus enhancing operational flexibility within healthcare practices.
3. Consolidated Appropriations Act Enhancements
The 2023 Consolidated Appropriations Act introduced new Stark and Anti-Kickback law exceptions aimed at improving mental health support within the healthcare sector. These include allowances for comprehensive physician wellness programs that extend beyond conventional limits, potentially encompassing suicide prevention and substance abuse treatment programs.
4. Streamlined Self-Referral Disclosures
In January 2023, CMS updated its voluntary self-referral disclosure protocols, simplifying the process with new forms that allow for electronic submission. This update aims to alleviate the administrative burden on healthcare providers and ensure more efficient compliance with Stark Law.
5. 2024 Inpatient Prospective Payment System Regulations
The upcoming 2024 regulations will impose stringent compliance requirements on physician-owned hospitals, tying their eligibility for Medicare referrals to strict adherence to Stark Law exceptions. This includes prohibitions on expanding facilities beyond their licensed capacity as of March 2010, unless an exception is explicitly granted by CMS.
6. Physician Compensation Oversight
In 2022, CMS updated policies concerning physician compensation plans, particularly those where productivity exceeds the 75th percentile. These changes emphasize the need for compensation to align strictly with services rendered, scrutinizing arrangements that might not meet fairness and commercial reasonableness standards.
7. Refined Indirect Compensation Rules
The 2022 Medicare Physician Fee Schedule Final Rule tightened regulations on indirect compensation arrangements, clarifying that compensation must not be tied to the volume or value of referrals unless it reflects fair market value. This includes new stipulations on leased space and equipment, addressing potential loopholes previously exploited under older regulations.
8. Family Member Referral Restrictions
Updates in 2022 refined the rules on indirect compensation for referrals to services performed by immediate family members, delineating clear definitions to prevent conflicts of interest and ensure compliance with ethical standards.
9. Advisory Opinion on Financial Ownership
In 2021, CMS clarified in an advisory opinion the circumstances under which physicians could refer patients to entities in which they have a financial ownership, stressing the importance of meeting specific exceptions to comply with Stark Law.
10. Fair Market Value Definitions
On January 19, 2021, CMS introduced new definitions of fair market value tailored to general services, equipment rental, and office space leasing. These definitions are designed to ensure that compensation agreements are made without consideration of potential referrals, aligning with bona fide service agreements that maintain ethical integrity.
These changes underscore a growing commitment by CMS to ensure that Stark Law adapts to evolving healthcare environments while maintaining stringent oversight to prevent unethical practices. Each update not only addresses immediate regulatory compliance but also sets a foundation for future healthcare governance.