Modernize Law Restricting Coordinated Care (“Stark Law”)

When Congress enacted the Medicare Access and CHIP Reauthorization Act, it replaced a fundamentally flawed reimbursement framework with a program promoting value-based care delivery. Value-based care, as measured by the new Merit-Based Incentive Payment System (MIPS) and alternative payment models (APMs), emphasize care coordination by physician practices.

Unfortunately, 20-year-old statutes that restrict integrated healthcare delivery remain on the books. Indeed, the Medicare law includes physician referral prohibitions (commonly known as the “Stark law”) that pose barriers to care coordination. The Stark law prohibits payment arrangements that may have an effect on the volume or value of referrals generated between physicians in the same medical practice.

These prohibitions stifle innovative delivery of care because they inhibit physician practices from incentivizing their physicians to deliver care more effectively to patients. Congress recognized this long ago when it allowed CMS to waive the self-referral and anti- kickback provisions for accountable care organizations. In addition, technical violations can trigger treble damages because of the strict liability standard.

Clinical urologists urge support for the Medicare Care Coordination Improvement Act (H.R. 2282 / S. 966), legislation that modernizes the Medicare referral law based on the following principles:

✅ Provides CMS the same authority to waive the Stark and Anti-kickback laws as was provided to Accountable Care Organizations in the Affordable Care Act;

✅ Removes the “value or volume” prohibition in the Stark law so that practices can incentivize physicians to abide by best practices and succeed in the new value- based alternative payment models. This protection would apply to practices that are developing or operating an alternative payment model (including, Advanced APM, APMs approved by the Physician Technical Advisory Committee, MIPS APMs and other APMs specified by the Secretary) and that are in writing and signed by parties to the arrangement (and recertified every six months), items and services must be subject to fair market value except that they may not take into account volume or value; and

✅ Creates a more workable standard that only triggers penalties for knowing and willful violations of the law, which is the current standard for civil penalty provisions of the Anti-Kickback Statute Violations of the Stark law with respect to physician ownership interests would continue to be considered problematic and potentially abusive on a strict liability basis.