Recent Stark Law Changes offer Opportunity to Reduce Costs, Improve Quality of Care

The Centers for Medicare & Medicaid Services (CMS), finalized changes to outdated federal regulations that have burdened health care providers with added administrative costs and impeded the health care system’s move toward value-based reimbursement.
The Physician Self-Referral Law, also known as the “Stark Law,” generally prohibits a physician from making referrals to an entity for certain healthcare services, if the physician has a financial relationship with the entity.
We sat down with Attorney Ayesha Mehdi to discuss new opportunities for health care practitioners to enter into arrangements that will benefit their patients and practice. “The Stark Law liability has been lowered,” she said, “there are many new opportunities that I am helping my clients explore, for example, practices can now share employees like nurses with hospitals; hospitals can provide practices IT infrastructure to support coordination of care; and practices can enter gainsharing arrangements.”
The previous federal regulations that interpreted and implemented Stark Law were designed for a health care system that reimburses providers on a fee-for-service basis, where the financial incentives are to deliver more services. However, the current system is moving toward financial arrangements that reward providers who are successful at keeping patients healthy and out of the hospital, where payment is tied to value rather than volume.

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