CLIENT ADVISORY: CMS Seeking Input to Reduce Potential Stark Law Barriers to Coordinated Care

Seeking to remove unnecessary government obstacles to care coordination, the Centers for Medicare & Medicaid Services (CMS) has issued a Request for Information (RFI) to help identify aspects of the physician self-referral law (Stark Law) that may be acting as potential barriers to coordinated care and additional public comment on possible new approaches.

Stark Law Overview

The Stark Law is intended to separate physicians’ health care decision making from their own financial interests in other health care providers and suppliers. The Stark Law (1) prohibits physicians from making referrals for certain designated health services (DHS) payable by Medicare to an entity with which they (or an immediate family member) have a financial relationship, unless an exception applies; and (2) prohibits the entity from filing claims with Medicare for such services, unless an exception applies. CMS has authority to promulgate regulatory exceptions for financial relationships that do not pose a risk of program or patient abuse.

CMS’s RFI Seeks Comment on the Following:

  1. Alternative payment models or other novel financial arrangements for existing or potential arrangements between DHS providers and referring physicians sponsored by CMS.
  2. New Stark Law exceptions for DHS entities and referring physicians who participate in the same alternative payment model.
  3. New Stark Law exceptions for financial arrangements that integrate and coordinate care outside of an alternative payment model.
  4. The practicality of the current exception for risk-sharing arrangements.
  5. The practicality of the special rule for compensation under a physician incentive plan within the exception for personal service arrangements.
  6. Possible approaches to address the application of the Stark Law to financial arrangements among participants in alternative payment models.
  7. Definitions for critical terminology in the Stark Law and coordinated care contexts.
  8. Definitions for any additional relevant terminology.
  9. Possible approaches to defining “commercial reasonableness” in the Stark Law exceptions.
  10. Possible changes to the definition of “fair market value.”
  11. In the current Stark Law context, when compensation should be considered to “take into account the volume or value of referrals” by a physician or “take into account other business generated” between parties to an arrangement.
  12. In the context of alternative payment models, when compensation should be considered to “take into account to the volume or value of referrals” by a physician or “take into account other business generated” between parties to an agreement.
  13. Whether and what barriers may exist to qualifying as a “group practice.”
  14. The application and utility of the current exception for remuneration unrelated to DHS.
  15. Any provisions in the Stark Law regulations for which additional clarification would be useful.
  16. The role of transparency in the Stark Law context.
  17. Whether and how CMS could design a model to test whether transparency safeguards other than those currently contained in the Stark Law could effectively address the impact of financial self-interest on physician medical decision making.
  18. Compliance costs for regulated entities.
  19. Recent studies assessing the positive or negative effects of the Stark Law on the health care industry.
  20. Whether and how CMS should measure the effectiveness of the Stark Law in preventing unnecessary utilization and other forms of program abuse relative to the cost burden on the regulated industry.

Submitting Comments

Respondents are encouraged to provide complete but concise responses. Respondents may submit comments addressing one or more of the questions posed in the RFI. All submissions must clearly identify and provide contact information for the respondent to be considered.

The full CMS RFI regarding the Stark Law was published in the Federal Register on June 25, 2018 and may be viewed at Comments on this RFI may be submitted at or sent by mail to the addresses specified in the RFI. Refer to file code CMS-1720-NC when commenting. Comments must be received no later than 5:00 PM on August 24, 2018.


With this RFI, physicians have an opportunity to explain to CMS the difficulties that they face in complying with the Stark Law while providing coordinated care to their patients, as well as suggest alternatives or updates to facilitate such practice.

Should you or your organization have questions about the Stark Law or need assistance in commenting on the RFI, please contact Peter Mellette or Harrison Gibbs at Mellette PC at (757) 259-9200.

This Client Advisory is for general education purposes only. It is not intended to provide legal advice specific to any situation you may have. Individuals desiring legal advice should consult legal counsel for up-to-date and fact-specific advice.

Categories: Client Advisory