CMS Clarifies Healthcare Stark Regulations and Finalizes New Stark Exceptions

On October 30, 2015, the Centers for Medicare & Medicaid Services (“CMS”) announced a new final rule for services furnished under the Medicare Physician Fee Schedule on or after January 1, 2016.  Among other things, the new final rule offers several clarifications intended to help reduce the burden on healthcare providers and facilitate compliance with Physician Self-Referral Stark (“Stark”) regulations.  CMS determined that certain Stark clarifications may reduce perceived or actual Stark violations without increasing the risk of federal program abuse.  The clarifications include:

  • The “writing” required by many Stark exceptions can be a collection of documents rather than a single formal contract.
  • The term of a lease or personal services arrangement need not be in writing if the arrangement continues for at least one year and is otherwise Stark-compliant.
  • Expired leases and personal services arrangements may continue indefinitely on the same terms if otherwise Stark-compliant. However, CMS cautions that to be Stark-compliant an arrangement must comply with the Fair Market Value (“FMV”) requirement. Providers must recognize that payments may cease to be consistent with FMV in long term arrangements.
  • Parties have a 90-day grace period to obtain missing signatures on a written document, regardless of whether the failure to obtain the signatures was inadvertent.
  • A split billing arrangement does not create a Stark financial relationship. When both the hospital and the physician bill independently for their services, there is no remuneration between the parties.

The new final rule also contains other clarifications and two new exceptions intended to enhance access to healthcare, particularly in rural and underserved areas.  The final rule will be published in the Federal Register on November 16, 2015.

For additional information about the new final rule for services furnished under the Medicare Physician Fee Schedule, Stark regulations or any area of health care law, please contact Indiana health care law attorney Ted Barron at or (812) 423-3183.

About the Author

Robert "Ted" Barron, Indiana Attorney
Ted Barron

Ted Barron is a member of KDDK’s Health Care Law practice team. He counsels numerous health care clients including hospitals, joint ventures, surgery centers, physicians, physician groups, rehabilitation centers, and mental health centers on contractual matters, regulatory and compliance issues, various operational matters and employment issues.

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