New Stark Exception Proposed
While the majority of the attention of the last few weeks surrounding the mid-year 2008 Medicare Physician Fee Schedule (“MPFS”) has been dedicated to physician payment rates, a proposed new exception to the federal physician self-referral law (“Stark Law”) was presented on June 30th, 2008 as part of the MPFS issued by the Centers for Medicare and Medicaid Services (“CMS”). The exception sets rules for certain incentive payments and shared savings programs between hospitals and physicians provided they meet certain criteria. While in the past, specific gainsharing and incentive payment arrangements have received favorable advisory opinions from the Office of Inspector General (“OIG”), none of the opinions addressed the arrangements under the Stark Law.
In brief, such arrangements would provide for physicians to receive incentivized remuneration as part of a well-documented program designed to improve the quality of hospital patient care services or achieve cost savings. The proposed program would be for no less than one year or no more than three years, and requires a written arrangement which clearly identifies the remuneration formula and specific performance measures that result in remuneration.
Some of the additional conditions as outlined by CMS would include:
- Utilize CMS’ Specifications Manual for National Hospital Quality Measures to identify and monitor patient quality care or cost saving measures;
- Establish baseline levels for the performance measures which include thresholds above or below which no payments will accrue to physicians;
- Include participation in each performance measure by at least five physicians, who meet certain eligibility criteria;
- Participation may be limited to a particular department or specialty, provided the opportunity to participate is granted to all physicians in the department or specialty;
- Establish an initial and annual independent medical review of the program’s impact on the quality of patient care;
- Establish baseline physician access to items, supplies, devices and technology not to fall below the level in place prior to the commencement of the program nor restrict the ability of physicians to make medically-appropriate decisions;
- Provide written disclosure to affected patients identifying physician participation and remuneration for meeting described performance measures targets;
- Limit payments in duration and amount, as well as take into account prior payments made for achieving performance measures; and,
- Remuneration paid to the participating physicians may not take into account the provision of greater volume of federal health care patient procedures or services.
The fully proposed rule was published in the July 7th, 2008 edition of the Federal Register, and CMS will be accepting comments on the proposed rule until August 29, 2008. If you would like additional information on the new Stark Law exceptions and how these arrangements may impact your facility, please contact the expert listed below at (800) 270-9629.
The information provided via PYA Alert, Tax Planning Alert, or Audit and Accounting Alert should not be construed as accounting, auditing, consulting, or legal advice on any specific facts or circumstances. The contents are intended for general information purposes only. Please contact us at (800) 270-9629 to discuss your specific situation or to discuss any specific questions you may have.
