Federal Policymakers Call for Reforms to Stark Law to Promote Care Coordination and Accelerate the Move to Value-Based Care > Hospital Association of Pennsylvania


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Federal Policymakers Call for Reforms to Stark Law to Promote Care Coordination and Accelerate the Move to Value-Based Care

July 18, 2018

A hearing before the U.S. House Ways & Means Health Subcommittee—Modernizing Stark Law to Ensure the Successful Transition from Volume to Value in the Medicare Program—highlighted the regulatory burden of the Stark Laws and affirmed the commitment of federal policymakers to pursue reforms that will help promote integrated and coordinated care.

In opening remarks, Subcommittee Chairman Peter Roskam (R, IL-06) called for Congress to “to update the laws to give providers an easing of burdens and give the Centers for Medicare & Medicaid Services (CMS) more flexibility to supply waivers to these providers who get into these high value arrangements.”

The Stark Law was originally enacted to ban doctors from referring patients to facilities in which the doctor has a financial interest (known as “self-referral”). The actual impact of the Stark Law has been not only to limit physician ownership of ancillary services, but to impede physicians’ ability to participate in beneficial relationships between physicians and hospitals, particularly in emerging population health initiatives.

Federal policymakers have acknowledged that the law has driven up costs for patients and created unnecessary complexity and regulatory stress for providers.

In a recent blog post, the CMS Administrator Seema Verma noted compliance with the Stark Law and accompanying regulations has been one of the top areas of regulatory burden identified by the provider community.

The Ways & Means Committee also has hosted a series of roundtable discussions—including with hospital leaders—to consider ways to cut red tape in the Medicare program, and Stark Law reform was a major subject of conversation during those forums.

Consistent with the Administration’s pledge to reduce regulatory burdens, CMS issued a solicitation for feedback on the undue impact and burden of the Stark Law and ways to dismantle barriers to value-based care transformation.

Through the Administration’s request for information (RFI), Administrator Verma and Department of Health & Human Services (HHS) Deputy Secretary Eric Hargan are calling for bold ideas on changes to Medicare’s regulations that will support close collaboration between doctors and other providers to promote a true value-based, patient-centered health care system.

CMS is particularly interested in input on:

  • The structure of arrangements between parties that participate in alternative payment models or other novel financial arrangements
  • The need for revisions or additions to exceptions to the physician self-referral law
  • Terminology related to alternative payment models and the physician self-referral law

In testimony during the Stark Modernization hearing, HHS Deputy Secretary Hargan stressed that HHS is “open-minded about the types of changes that may be needed to make the Stark Law more compatible with the push toward integrated care and alternative payment models.”

HAP has consistently called for Stark Law reforms in response to CMS’s requests for input on avenues to provide meaningful regulatory relief, and in working with Congressional leaders on legislative regulatory reform efforts. HAP is in the process of convening Pennsylvania hospital leaders to garner feedback on productive input to provide to the Administration. HAP will be issuing a comment letter by the August 24 deadline.

Please contact Jeff Bechtel, HAP’s senior vice president, health economics and policy, or Laura Stevens Kent, HAP’s vice president, federal advocacy, for more information on federal Stark law modernization efforts or to provide insight to inform HAP’s response to the RFI.

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