Last week the Centers for Medicare and Medicaid Services (CMS) issued regulations to eliminate some hurdles under the “Stark” Physician Self-Referral law to the introduction of physician fee agreements using value-based payment arrangements. The updated rules are the first significant revisions in two years to the regulations and the first effort by CMS to amend the regulations directly to counter the prevalence of value-based payment agreements since the regulations were implemented back in the early 2000s.

The revised regulations include a trio of exceptions to the general ban of the Stark legislation on physician referrals to entities in which the physician has a contractual partnership for designated health programs that are explicitly aimed at value-based arrangements. For example, one exception targets value-based arrangements involving complete financial risk.

Also, and perhaps most significantly, the new rules change the Stark law’s ‘takes into account the amount or importance of referrals’ phrase. Under the new rules, the compensation of a doctor varies with the amount or importance of the doctor’s referrals only if the calculation used to determine the compensation of the doctor (or closest family member) contains the referrals of the doctor to the agency as a measure, resulting in a rise or decrease in the compensation of the doctor (or family member) that compares favorably with the compensation of the doctor (or family member).

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