2019 CMS Physician Fee Schedule Solidifies Stark Changes

IMPORTANT REGULATORY UPDATES!

By: Gina L. Campanella, Esq., FACHE

Earlier this month, the Centers for Medicare and Medicaid Services (“CMS”) published their long awaited 2019 Physician Fee Schedule and Final Rule.  One important regulatory element of the 2019 Physician Fee Schedule and Final Rule confirmed and finalized changes to the Stark Law, originally made in February, with the passage of the Bipartisan Budget Act of 2018.  In summary, the important changes to know are as follows:

  1. Collection of Documents Satisfies “In Writing” Requirement.  It has been accepted past practice of CMS to consider, and potentially allow a “collection of documents” to be examined and to satisfy the “in writing” requirement of those Stark law exceptions that require clear written agreements as to compensation.  For example, compensation arrangements for contractors, leases and subleases of office space, and leases or subleases of staff or equipment are all arrangements that require a formal written agreement, which must contain specific representations and elements, for these arrangements to be a Stark exception.  With the publication of the Bipartisan Budget Act of 2018 and the subsequent publication of the 2019 Physician Fee Schedule and Final Rule, such practice of considering a collection of documents, in the absence of a formal document, has now become officially accepted.
  2. 90-Day Cure Period Rules Relaxed for Signature Non-Compliance.  Entities have been be able to take advantage of a 90-day cure period to ensure that necessary documents, like those required in the paragraph above, are properly signed before they are deemed in non-compliance with Stark due to lack of such signatures.  The previous rule only allowed entities to take advantage of this cure period once every three years as to the same referring physician.  In order to take advantage of this cure period, the entity must be following the terms of the document and such terms must be entirely in compliance with the only non-compliant factor being lack of signature(s).  The Bipartisan Budget Act of 2018 and the 2019 Physician Fee Schedule and Final Rule both relax this rule by eliminating the limitation of this exception to once every three years and by making it applicable to all Stark exceptions, not just those that had been previously enumerated.
  3. Indefinite Lease and Personal Service Contract Holdovers Affirmed.  CMS has recognized the indefinite holdover of expired lease and personal service agreements that are otherwise compliant with Stark since 2016.  With the passage of both the Bipartisan Budget Act of 2018 and the 2019 Physician Fee Schedule and Final Rule, this recognition is now formalized.

If you believe that these updates require review of any of your financial arrangements that are subject to the Stark Law, do not hesitate to contact the office.

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