WASHINGTON – The book appears complete on the federal government’s rules attempting to limit the possibility of financial conflict of interest by physicians who refer patients to their own facilities.
The Centers for Medicare & Medicaid Services this week issued the final regulations prohibiting physicians from referring patients for certain items, services and tests provided by businesses in which they or their immediate family members have a financial interest.
The regulations are the final iteration of rules intended to implement physician self-referral prohibitions, commonly called the Stark law. The rule is available online and is expected to be published September 4 in the Federal Register.
CMS expects the final rule to take effect on December 4.
Legislation was championed by Rep. Fortney “Pete” Stark (D-Calif.) in the early 1990s. Stark and his office had no formal comment on CMS’ move to issue the final regulations.
The third phase of rule-making was in response to public comments that followed the March 2004 publishing of the interim final rule in the Federal Register. CMS said the rule does not establish any new exceptions to the self-referral prohibition; however, it contains refinements that could permit or require restructuring of some existing arrangements.
For the most part, the adjustments provide flexibility to enable the healthcare industry to face some current pressures. For example, it provide more flexibility in structuring compensation arrangements when organizations try to recruit physicians to rural areas, and it enables hospitals to show appreciation in annual events to their staffs.
The rule also provides flexibility in the case of inadvertent violations of the self-referral prohibition, allowing facilities to seek remedies in such events.
The final rules also reduce the regulatory burden for complying with certain exceptions and it clarifies the agency’s interpretation of existing regulations.
“The rule…strikes the proper balance between protecting patients and the program, and provides needed flexibility to healthcare entities to ensure the provision of quality care to our beneficiaries without unnecessarily impeding non-abusive arrangements,” said Herb Kuhn, acting deputy administrator of CMS.
The American Hospital Association is in the process of reviewing the final regulation, but didn’t find any areas of concern in its initial quick review.
“At first glance, the CMS rule issued on Monday makes incremental changes to existing exceptions and contains no new exceptions to the ‘Stark’ law, which prohibits physician self-referral,” said an AHA spokesman. “The rule makes no new policy and closes the loop on several questions from earlier phases of the rule.”
The AHA applauded the adjustment to physician recruitment restrictions, which, it said should make it easier for rural hospitals to recruit more physicians.