FY 2009 Stark Law Amendments

Posted on September 22, 2008 by Veronica Marsich

 

DHS entities need to move quickly to take inventory of their existing financial arrangements to determine or confirm that all appropriate financial arrangements are in writing and fully executed by the parties. They must then evaluate the nature of the compensation under any space or equipment leases which may involve referring physicians, to ensure that the compensation is not on a percentage or per click basis. If those agreements do determine compensation in that manner, then they must be renegotiated as quickly as possible. Finally, DHS entities need to begin to budget and allocate appropriate resources in the event that they are one of the 500 institutions to receive a DFRR request. DHS entities will have only 60 days to respond to a DFRR request if received.

 

On August 1, 2008, the Center for Medicare and Medicaid Services ("CMS") issued its most recent revisions to the Stark law regulations. Changes were published in the Federal Register on August 19th as part of the FY 2009 Inpatient Prospective Payment System. Many of the changes made by CMS were previewed in language proposed in CMS’s proposed physician fee schedule for 2008 published last fall. Those not previewed at that time were previewed this year in the FY 2009 Proposed IPPS Rule.

There are several topics of particular interest for physicians and DHS entities in these revised regulations. They include:

    • Clarifications and limitations regarding the ability of physicians and DHS entities to carry out their perspective obligations under a negotiated financial arrangement in the absence of a fully executed written agreement, where the execution of a written agreement is a required element of the relied upon Stark exception;
       
    • The elimination of percentage based compensation in all lease agreements for space and/or equipment;
       
    • The elimination of the per click compensation methodology in all lease agreements for either space or equipment; 
       
    • Expand the definition of DHS entity to include those who perform DHS; 
       
    • A decision by CMS to move forward with its DFRR financial transaction reporting program.
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