Stark Law tagged as barrier, CMS to perform top-to-bottom review

May 02, 2019
The Bottom Line

During her speech at the National Association of Accountable Care Organizations Spring 2019 Conference, CMS Administrator Seema Verma referred to the Stark Law as an outdated regulation that “addressed real issues regarding the potential for financial incentives to inappropriately influence how physicians make decisions” when it was enacted 30 years ago, but that serves little purpose under a value-based system.

“When payment is for outcomes, and not for services, providers need more flexibility to make referrals.  However, the safeguards put in place under the Stark Law limit providers’ ability to make referrals or coordinate care in innovative ways,” said Verma.

CMS will perform a top-to-bottom review of the current Stark Law to ensure that the regulations are “encouraging, rather than hindering, the move to value.”

Verma also commented on new models being developed under the Accountable Care Organization (ACO) program as part of CMS’ value-based transformation plan. Providers can expect some of these models to be mandatory, explained Verma: “One reason for mandatory models is that selection effects can be significant in voluntary models.  Selection effects happen when only the providers who would benefit financially from a model choose to participate, thereby reducing the amount of savings that the model can generate.  Requiring participation also helps us understand the impact of our models on a variety of provider types, so the data resulting from the model will be more broadly representative.”

Read the full press release here.

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