Providers Take Note: What the New Stark Regulations Mean to You
In an important development, the Centers for Medicare and Medicaid Services (CMS) has issued additional final regulations implementing the Stark Law as part of the Physician Fee Schedule for calendar year 2016 (see 80 Fed. Reg. 70,886 (Nov. 16, 2015)). The final rule adopts the majority of the changes proposed in July 2015 by CMS and previously analyzed here. Note, however, that some of the key provisions appear in revised regulatory text, while others are only contained in the regulatory preamble. Many of the changes, including the creation of a new timeshare arrangement exception, are intended to make it easier for providers to comply with the Stark Law’s complex requirements. Various “clarifications” described in the preamble also should generally make it easier to comply, particularly with those Stark exceptions that require a signed, written arrangement with a minimum term of one year. The final rule also includes a new exception for the employment of nonphysician practitioners and finalizes certain changes related to physician-owned hospitals.
The vast majority of provisions in the final rule are effective January 1, 2016. However, in light of the fact that certain arrangements involving physician-owned hospitals may need to be unwound due to the change to the definition of “bona fide investment level,” the applicable provision in the final rule will not be effective until January 1, 2017. Moreover, some of the “clarifications” in the preamble reportedly reflect how CMS has always interpreted certain regulatory provisions. As a result, some of these clarifications may have retroactive impact.
Since the Stark Law is a strict liability statute, and since there have been a substantial number of multi-million dollar settlements in False Claims Act cases related to the Stark Law recently, providers should carefully determine whether the revised regulations impact their current arrangements and take any action necessary to ensure compliance now and in the future. Some of the most significant provisions in the final rule are briefly summarized below.
*This alert was originally posted on Arent Fox's Health Care Counsel blog. To read this alert in its entirety, please click here.