Congress seeks reform of self-referral law

October 1, 2016

A serious effort to reform the federal physician self-referral law (the Stark law) to reduce the regulatory burden imposed by the statute on medical practices is underway in Congress, and organizations representing urology are encouraging lawmakers to take action. But there is a key component of the law that the AUA and others want to be sure is not changed.

Bob GattyWashington-A serious effort to reform the federal physician self-referral law (the Stark law) to reduce the regulatory burden imposed by the statute on medical practices is underway in Congress, and organizations representing urology are encouraging lawmakers to take action. But there is a key component of the law that the AUA and others want to be sure is not changed.

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“We want to protect the in-office ancillary services exception,” explained Jeffrey M. Frankel, MD, a Seattle-based urologist who chairs the American Academy of Clinical Urologists’ (AACU) Health Policy Committee. “That is extremely important, especially for independent practices.”

The AACU, the AUA, and LUGPA all have submitted comments to the Senate Finance Committee, which has been considering Stark law reform and whose chairman, Sen. Orrin Hatch (R-UT), has said he hopes to introduce reform legislation by the end of the year.

Changes would clarify provisions

Hatch made the comments at a July 12 hearing during which he proposed changes to address issues such as excessive penalties for technical violations and a lack of clarity over provisions of the law, adding that the statute and its subsequent regulatory interpretations have become exceedingly complex and actually create obstacles to new health care reimbursement arrangements promoted by the Affordable Care Act.

What gives the initiative legs is the support provided by some Democrats. Ron Wyden (D-OR), the top Democrat on the committee, noted that the health care system today is moving toward coordinated care-encouraged by the government-and that can result in violations of Stark. The law essentially prohibits physicians from referring patients to facilities where they have ownership interests.

The in-office ancillary services exception (IOAS) to Stark allows physicians to provide specific services in their offices, like imaging and physical therapy, that normally would be prohibited by Stark. Organized urology supports maintaining that exception, arguing that Congress’ primary objective was to make imaging services convenient for patients during their visits, rather than requiring them to go elsewhere.

“Without the current in-office ancillary services exception and list of in-office ancillary services, patients would be required to schedule follow-up tests and treatments with a second medical provider,” the AUA wrote in its submission to the Finance Committee. “Were this to occur, AUA submits that compliance with follow-up tests or treatment would fall off dramatically, harming care coordination efforts.”

Thus, the AUA concluded, “Because in-office ancillary services, as currently conceived by Congress and implemented by CMS, benefit patients in terms of coordinating care, convenience, and efficiency, AUA believes the current list of ‘in-office ancillaries’ should not be changed.”

Next: ASTRO's position

 

The American Society for Radiation Oncology (ASTRO) has taken a contrary position. ASTRO’s chairman, Bruce D. Minsky, MD, said, “ASTRO supports narrowing the IOAS exception to limit inappropriate physician self-referral for radiation therapy services.”

Read: Federal agencies consider telehealth, scope of practice proposals

One key aspect of the Stark law that does need to be updated, according to the AUA, LUGPA, and the AACU, involves removing or modifying the statute’s compensation arrangement requirements.

In its letter to the Finance Committee, the AUA pointed out that under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), eligible physicians may earn incentive payments from CMS by participating in a variety of alternative payment models (APMs) that are defined in the statute. These include a Medicare Shared Savings Program accountable care organization, for example.

Noting that regulations implementing MACRA APMs have yet to be issued by the Centers for Medicare & Medicaid Services (CMS), the AUA pointed out that physicians receiving those payments do not need a waiver from Stark. That law “must be modernized to encourage and facilitate physician participation in… MACRA APMs in the first instance,” the AUA said.

Every time a new APM is unveiled by CMS, new fraud and abuse waivers are released to cover them, the AUA noted.

“It is the AUA’s belief that this approach is fragmented, and leads to significant uncertainty in the wider provider community,” the AUA wrote. “A long term Stark solution is required.”

That solution, said the AUA, would be to create a legislative Alternative Payment Model Exception that would apply to all MACRA APM financial arrangements and thus provide incentives to physicians to participate in the new payment models “in furtherance of the government’s cost reduction and quality improvement goals.”

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Moreover, said the AUA, those incentives must be “proportionally linked to the amount of work undertaken by a physician.”

Next: LUGPA calls for several changes

 

LUGPA calls for several changes

In its letter to the Committee, LUGPA called for these changes to Stark:

  • Extend waivers to cover relationships necessary for participation in APMs or a private equivalent.

  • Modify CMS’s authority to create new exceptions and other regulatory changes to the scope of the Stark law to require CMS to proactively support congressional payment reform.

  • Clarify that the definition of “fair market value” in Stark is not intended to prohibit health care practices from paying compensation to incentivize high-quality, cost-efficient care, even if that compensation takes into account the volume or value of referrals.

  • Revise the definition of “group practice” to clarify that members of group practices may be paid on the basis of furnishing high-quality care without running afoul of the Stark law.

While it does not appear that Stark reform can be finalized during the current Congress, which likely will conclude with a post-election “lame-duck” session, the table has been set for action in 2017 after the new Congress convenes. If bipartisan support holds, the outlook for reform appears to be positive.

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