A Potential Change to Stark Regs. Affecting Docs

August 5, 2015

Breaking down how the latest proposed rule from CMS could impact physician self-referral regulations and what it means for physicians.

On July 8, 2015, CMS issued the proposed 2016 Physician Fee Schedule (“Proposed Rule”), which was published in the Federal Register one week later.  Among many provisions within the proposed rule were ones that could possibly impact the physician self-referral regulations (“Stark”). This included the following:

• Recruiting advanced practitioners may become easier under CMS’ proposal to establish a new Stark exception for payments made by a hospital, Federally Qualified Health Center (“FQHC”), or Rural Health Center (“RHC”) to a physician to assist in the recruitment and employment of non-physicians.  This would allow the recruitment of PAs, NPs, and other mid-levels, as long as they become bona fide employees of the physician or physician practice receiving the support and if they are employed to render primary care services. CMS’ proposal would limit the financial support to two years, but the exception would otherwise be similar to the current recruitment exception.

• Easing technical issues and confusion is another goal of the Proposed Rule’s changes to Stark, particularly as it relates to CMS’ Voluntary Self-Referral Disclosure Protocol. Some clarifications that are proposed, which will be beneficial to providers include:

  a. Clarifying that a “writing” or “written agreement” does not actually require a single formal contract. This means that a series of contemporaneous documents that could demonstrate the course of the parties’ conduct could meet this “writing” requirement, depending on the facts.

  b. Providing 90 days (instead of the current 30 days) to obtain missing signatures to an agreement, regardless of the reason the parties failed to obtain the signatures in a timely manner.

c. Allowing a holdover arrangement as long as it continues on the same terms and conditions as the original compliant arrangement and payment remains fair-market value throughout the holdover period.

• CMS proposes to allow timeshare leases under a new exception for lease arrangements involving the non-exclusive “timeshare” lease of space, equipment and personnel.  Arrangements would qualify if certain requirements are satisfied, and as long as the arrangement does not involve advanced imaging equipment, radiation therapy equipment, or clinical /pathology laboratory equipment. This exception would not be available to non-hospital/ physician organizations (such as IDTFs and clinical labs) and the space must be used predominantly

One other non-Stark item in the Proposed Rule that may be particularly interesting to physicians is a change to the “incident to rules.” These  provisions allow services provided by auxiliary personnel to be billed as though furnished by a physician or other provider if direct supervision is provided (except chronic and transitional care management, which now requires only general supervision).  Although many physicians already grapple with proper use of these rules, CMS now proposes to require “that the physician or other practitioner who bills for ‘incident to’ services must also be the physician or other practitioner who directly supervises the auxiliary personnel who provide the ‘incident to service.’”  

Under the current regulations, the billing physician or other practitioner need not be the supervising physician or other practitioner.  This rule may complicate scheduling among providers and make the provision of transitional care management and chronic care management less cost-effective, since these services currently only require general supervision. Furthermore, the proposed changes are not in keeping with efforts to reduce health care costs and increase efficiencies.

To see the full Proposed Rule, go to https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-16875.pdf. Comments on the Proposed Rule are due Sept. 8, 2015.