Hearing Examines Stark Law Burdens, Barriers to Value-based Care

The House Ways and Means Health Subcommittee yesterday held a hearing on modernizing the Stark Law to facilitate value-based care. Enacted in 1989, the law generally prohibits physicians from referring certain Medicare patients to an entity in which they or an immediate family member have a financial interest. 
 
“But, what made sense for the health care system in the 1980s does not necessarily translate to the modern health care system,” Health and Human Services Deputy Secretary Eric Hargan told the subcommittee. In a health care system moving to value-based payments, the law “may unduly limit ways that physicians and health care providers can coordinate patient care,” he said, calling the department “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.”
 
Also testifying at the hearing, Advocate Aurora Health Chief Integration Officer Michael Lappin said the law “has turned into an outdated set of legal requirements that is now inhibiting innovation and blocking ability to realize the benefits of value-based care. … Even with regulatory exceptions and guidance, the law has an extremely broad prohibition on physician referrals that prevents us from considering many types of value-based arrangements because we would not want to run the risk of facing enormous penalties.”
 
In a statement submitted to the subcommittee, AHA recommended legislative and administrative actions to facilitate value-based care under the Stark Law. Specifically, AHA urged Congress to remove the compensation provisions under Stark, which “do not support a value-based system,” and create a safe harbor under the Anti-Kickback Statute for clinical integration arrangements. It also urged the Centers for Medicare & Medicaid Services to create an innovative payment exception for value-based payment arrangements, and clarify critical requirements of the Stark law and exceptions to the law.
 
CMS last month released a request for information on how it can reduce regulatory burdens and obstacles to care coordination associated with the Stark Law. Comments are due Aug. 24.