Client Alert: CMS open door forum on new Stark regulations
HIGHLIGHTS OF THE FORUM
- There are three new exceptions to the Stark Law for value-based compensation arrangements: (i) the full financial risk exception, (ii) the meaningful downside financial risk exception, and (iii) the value-based arrangement exception. CMS introduced and defined several terms in connection with these exceptions, including value-based activity, value-based arrangement, value-based enterprise, value-based purpose, VBE participant and target patient population. Services must meet the definition of value-based activity, for example, to qualify for the value-based arrangement exception. These new exceptions do not require, however, that compensation to the physician be set in advance, consistent with fair market value or determined in a manner that does not take into account the volume or value of the physician’s referrals or other business generated by the physician.
- The final rule clarifies several terms and provisions of the Stark Law, including (i) defining the previously undefined term “commercially reasonable” to mean that “the particular arrangement furthers a legitimate business purpose of the parties to the arrangement and is sensible, considering the characteristics of the parties, including their size, type, scope, and specialty”; (ii) revising the special rule on compensation to permit satisfaction of the “set in advance” requirement even if compensation is modified during the course of a compensation arrangement so long as certain conditions are met; and (iii) introducing a new special rule on writing and signature requirements allowing parties to obtain required writings or signatures within 90 days following the date on which the writings or signatures were required.
- The final rule removes the sunset provision for and revises the exception for electronic health records items and services and adds a new exception for nonmonetary remuneration in the form of cybersecurity technology and related services.
Please contact one of the following members of the Moore & Van Allen health law practice team if you have any questions: