A deeper dive into CMS' proposed Stark Law modifications: 6 key points

CMS released a proposed rule earlier this month that would update the Medicare Physician Fee Schedule for calendar year 2016. The proposed rule contains a number of new policies, including Stark Law modifications.

Here are six key takeaways from the proposed rule regarding Stark Law.

New exceptions
1. Stark Law prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which the physician or an immediate family member has a financial relationship. However, there are several exceptions to the rule.

2. CMS proposes establishing a new Stark Law exception to permit hospitals, federally qualified health centers and rural health centers to provide remuneration to physicians for recruiting nonphysician practitioners. However, for the new exception to apply a number of conditions must be met. For example, the nonphysician practitioner must be a bona fide employee of the physician, according to a Mondaq report.

3. In the proposed rule, CMS calls for timeshare arrangements with physicians that involve a hospital or physician organization acting as the licensor to be allowed under Stark Law. However, there are several requirements that must be met for this exception to apply, such as compensation must be set in advance, according to the report.

Changes to technical requirements
4. Various Stark Law exceptions require the arrangement to be in writing, and in its proposed rule, CMS calls for the relaxation of that requirement. CMS states there is no requirement for a particular kind of writing, and says in certain circumstances a "collection of documents" may suffice. However, CMS did not provide specific examples of when a collection of documents could satisfy the writing requirements, according to the Mondaq report.

5. Current Stark Law exceptions for equipment rentals, space rentals and personal services require the arrangements to have a term of at least one year. In the proposed rule, CMS explains that the one-year term requirement can be satisfied as long as contemporaneous documentation can be produced that shows the arrangement lasted for at least one year.

6. Multiple Stark Law exceptions require an arrangement to be signed by all parties. Under the proposed rule, parties would be given 90 days to obtain any missing signatures regardless of whether the failure to originally get the signatures was inadvertent or not. Currently, when the parties' failure to obtain a signature is not inadvertent they are required to get the signatures within 30 days, according to the report.

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