Here are three things you should know about the potential changes to Stark law in the CMS-proposed rule. Get familiar with them now, and you’ll have less work to do when the rule is finalized.

3 Major Updates to Stark Law Coming Soon

If you’re confused about the best way to stay in compliance with the Stark law against physician self-referral, you’re not alone. Many providers and staff struggle with understanding this complex law and avoiding its significant penalties. Now, more changes are coming your way. In October 2019, CMS proposed a number of updates to Stark. While the rule–which was originally enacted in the 1980S and has undergone many revisions since then—is not yet final, you can start preparing for potential changes now.

Reminder: The Stark law states that a physician cannot refer a Medicare/Medicaid patient to receive certain designated health services from an entity where the physician (or the physician’s immediate family member) has a financial interest. Stark prohibits physician self-referral and is intended to protect patients from conflicts in medical decision making.

Stark Violations Aren’t Always Obvious

Sometimes violations of the Stark law are plain as day—consider bribery, paying for referrals, or no-work consulting agreements. These are things that scrupulous physicians know they should avoid. But more often, Stark violations fly under the radar, surfacing only because physicians fail to ensure that a certain business arrangement—leasing medical space or investment opportunities, for example—falls into one of Stark’s many safe harbors.

Since penalties for Stark violations include heavy fines and even revocation of Medicare billing privileges, it pays to be aware of the upcoming Stark law changes and ensure that your practice stays on the right side of regulations. And don’t forget—the Stark law allows regulators to go after providers for unintentional violations, so being unfamiliar with Stark basics is no excuse.

3 Potential Updates to Stark

Here are three things you should know about the potential changes to Stark in the CMS-proposed rule. Get familiar with them now, and you’ll have less work to do when the rule is finalized.

1. The Stark updates take value-based arrangements into account. The shift towards value-based reimbursement is unstoppable, but the Stark law as it is written is potentially getting in the way. Fear of violating Stark prevents physicians from pursuing some value-based arrangements (such as shared-savings or arrangements including financial incentives.

CMS already offers waivers to providers participating in the Medicare Shared Savings Program. Participating providers can receive bonuses for meeting cost and quality targets without those payments being interpreted as violating Stark. Now, CMS proposes to add new exceptions to Stark that would promote a wider variety of value-based care arrangements.

2. The Stark updates take cybersecurity seriously. CMS is proposing a new exception to protect arrangements involving the donation of cybersecurity technology and related services. For example, a hospital could provide free cybersecurity software to physician practices that refer patients to that hospital without it being interpreted as incentivizing physician referrals. Protecting patient PHI is in everyone’s best interest, and CMS understands that the benefits of such arrangements outweigh the risk of fraud.
3. The Stark updates will reduce the burden of documentation. CMS is proposing a new exception to protect payment to a provider (of up to $3,500 per calendar year) without having to document the amount or formula for calculating the amount of payment in advance of the services being provided.