It’s been well established that the health care system is moving from a fee-for-service world to one where payers reward value over volume. This requires care coordination and providers across the health care continuum working together to achieve the best outcomes for patients.
But regulations made for a fee-for-service world aren’t keeping up with the transition to value-based care. In fact, they are inhibiting it … something hospitals have been saying for years. Working with our members, we’ve collected examples and outlined how the physician self-referral, or “Stark,” law impedes coordination and shared concrete recommendations for modernizing the law with legislators and regulators.
Now, we’re pleased to see that there is a growing consensus and momentum among legislators and regulators on both sides of the aisle that some changes are needed. 
This week, as the House Ways & Means Committee Health Subcommittee examined the issue, Health and Human Services Deputy Secretary Eric Hargan acknowledged the law is no longer working as intended in the new world of value-based care. Chair Peter Roskam (R-IL), who has been holding conversations with stakeholders, including the AHA, on what changes are needed, noted there is bipartisan agreement that Stark needs updating. “The goal here is shared by all. Better care for Medicare patients,” he said. Senate Finance Committee Chair Orrin Hatch (R-UT) also has been contemplating needed changes to the law, noting at a previous hearing that the law “presents practical and outdated barriers in need of updating.” 
Similarly, former HHS Secretaries Kathleen Sebelius and Tommy Thompson this week urged action, saying, “Over time, many regulations were adopted and designed to prevent fraud and abuse — a worthy goal. But many regulations, designed for a fee-for-service model, now create roadblocks in the move toward a value-based system and need to be modernized.”
We agree. 
HHS recently asked for feedback on how to make the Stark regulations work in the age of value-based care. We are urging the agency to create a new payment exception for value-based payment arrangements. Creating this exception would present hospitals with a new opportunity to implement incentives that drive physician decision-making toward high-value care for each and every patient they see. We recommend that the exception protect value-based incentive programs that promote: (1) accountability for the quality, cost and overall care of patients; (2) care management and coordination; and/or (3) investment in infrastructure and redesigned care processes for high-quality and efficient care delivery. 
Health care delivery is changing, and the regulations that govern it need to keep pace. To truly realize the promise of value-based care for patients, we need action. We’re pleased to see stakeholders working to come to consensus on changes to Stark and stand ready to help move forward. 

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