CMS Delays Release of Stark Law Modifications Until Aug. 2021

By: | August 27, 2020

The Centers of Medicare & Medicaid Services (CMS) announced it is formally extending the deadline for when it must publish the final rule amending the physician self-referral regulations. The deadline is now listed as August 31, 2021.

The agency first proposed these changes in October 2019 as part of the agency’s broader effort to promote value-based care in Medicare (details on the proposed rule here). In brief, the proposed rule outlined potential new exceptions to the physician self-referral law for the following: certain value-based compensation arrangements between or among physicians, providers, and suppliers; certain arrangements under which a physician receives limited remuneration for items or services actually provided by the physician; and donations of cybersecurity technology and related services. These proposed exceptions are intended to allow providers to more easily form care coordination-oriented arrangements with one another without fear of incurring penalties from violating current self-referral rules (otherwise known as “the Stark Law”).

While the latest Spring 2020 Unified Agenda indicated the agency would then promulgate its final rule in August 2020, CMS has now indicated it will give itself until August 31, 2021 to finalize these changes. The agency states it is still “working through the complexity of the issues raised by comments” it received from stakeholders.

Of note, this announcement comes after numerous health care providers, trade organizations, and lawmakers issued formal statements to the agency requesting it expedite the rule’s finalization (e.g., here). Comments on the proposed rule were largely in support of CMS’ intentions, though some groups suggested the agency could go farther by including commercial insurers (i.e., not just Medicare and Medicaid). Others were also opposed to the proposal’s provision that would make certain exceptions to the Stark Law rules conditional on meeting price transparency requirements.

Given this latest announcement, however, it is now likely that CMS will delay finalization of these changes until 2021. Though the agency made no explicit statements regarding the companion rule from the Department of Health and Human Services (HHS) Office of the Inspector General (OIG), it is likely these changes – implicating the related Anti-Kickback Statute – will also be delayed.

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Josh LaRosa