CMS Will Review Stark Law in Bid to Ease Regulations

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CMS Administrator Seema Verma said the administration will review the so-called Stark Law, which was enacted to prevent independent physicians from referring Medicare patients to facilities where they have a financial benefit.

CMS Administrator Seema Verma said Wednesday that the administration will review the so-called Stark Law, which was enacted to prevent independent physicians from referring Medicare patients to facilities where they have a financial benefit.

The comments came during a webcast with the American Hospital Association, during which Verma also reiterated her priorities for CMS, including the Patients Over Paperwork initiative, moving towards a fee-for-value system, helping rural health providers, and supporting states that want to implement Medicaid work requirements for able-bodied adults.

The Stark Law is formally known as the Ethics in Patient Referrals Act, but is more commonly known as the Stark Law for its author, then-US Rep. Fortney “Pete” Stark (D-California). The law was passed in 1989 and expanded in the 1990s, and was further accompanied by rules and regulations that doctors say are limiting their ability to advance in a healthcare system that prioritizes advanced alternative payment models that incentivize care coordination.

Rick Pollack, president and CEO of the American Hospital Association, asked her if there are ways that CMS can help facilitate ways for hospitals and doctors to work together, beyond the waivers that have been granted for accountable care organizations.

Verma said CMS will create an interagency group to review the law, and she said it may require “congressional intervention” as well. The group will include CMS, HHS' Office of Inspector General, HHS' General Counsel, and the Department of Justice.


“Stark was developed a long time ago, and … this sort of gets to where we’re going with modernizing the program. This was developed a long time ago and the payment systems and how we’re operating is different,” she said.

Pollack and Verma also spoke about:

Patients Over Paperwork

“I understand that sometimes CMS has been a barrier to innovation,” Verma said. She said CMS wants to “strengthen the doctor-patient relationship by making sure that decisions about healthcare are happening between the patient and the provider and making sure that the government is out of the way.”

Verma said CMS is preparing for “a new generation of beneficiaries, especially in our Medicare program, where we know this is a very tech-savvy population that’s coming in the program. How can we prepare and how can we give them the tools that they’re going to expect? They’re going to expect more of an Amazon-like experience.” She did not elaborate on that point.


How aggressively will CMS will move on fee-for-value (FFV) as trends move away from fee-for-service, Pollack asked?

Verma said CMS is committed to a system that favors values and outcomes, but that she had questions, such as knowing exactly what is being measured and what the outcomes are. “We are dedicated to innovation around payment reform,” she said, adding that CMS will have more to say about the issue soon, especially in regard to accountable care organizations.

Rural Hospitals

Pollack noted that given their small size and limited resources, rural hospitals have special challenges. Verma said they made changes to the Merit-based Incentive Payment System (MIPS), and while that is aimed at providers, they are committed to working on the issue and, as part of that, she now looks at policies with an eye toward figuring out what the impact would be on rural providers.

Medicaid Work Requirements

Pollack noted this was not a regulator issue, but given that it was a “hot topic,” he offered her the chance to talk about the administration’s guidance about how to require work from able-bodied people collecting Medicaid.

Verma said allowing work requirements is about “empowering our states” and moving away from it being a "federally dictated, mandated program" so that states can be more flexible. She said CMS has heard from 11 states that are seeking waivers to allow the work program, which she said will “enable individuals to gain self-sufficiency.”