Two major Stark changes you need to know about in 2016 - DoctorsManagement Two major Stark changes you need to know about in 2016 - DoctorsManagement

Two major Stark changes you need to know about in 2016

CMS is relaxing some of the burdens associated with the “Stark Law,” also known as the physician self-referral law. Several new exceptions are being created and CMS is also clarifying some of the longstanding provisions. The first will allow hospitals, federally qualified health centers and rural health clinics to pay physicians who employ NPPs.The 2016 final rule also creates a new exception for timeshare arrangements where hospitals or physician organizations share support staff, office space, equipment, supplies, and other items with physicians.

These changes are being implemented on Jan. 1, 2016, as part of the Medicare Physician Fee Schedule final rule for 2016.

Let’s take a detailed look at the two major changes to Stark Law that you should be aware of.

  1. Compensation for NPPs. CMS is adding a new exception to the Stark Law for compensating non-physician practitioners (NPPs). Hospitals, federally qualified health centers (FQHCs), and rural health clinics (RHCs) may compensate physicians for employing NPPs in the geographic service area of the hospital, health center, or clinic. Prior to this exception, Stark allowed hospitals and other organizations to pay physicians to relocate to their service area, but not NPPs to relocate. CMS is making this change due to the demand for NPPs not just in primary care, but for surgical specialties such as orthopaedics as well.
    1. Six types of NPPs are included under the new exception: physician assistants, nurse practitioners, clinical nurse specialists, certified nurse midwives, clinical social workers, and clinical psychologists.
    2. To qualify for this exception, at least 75% of the NPP’s services must be primary care and/or mental health in nature.
    3. The compensation arrangement with the physician must meet existing Stark provisions, such as having to be in writing and signed by the hospital (or FQHC or RHC), physician, and NPP. The compensation agreement can’t be based on on the physician or NPP’s referral of patients to the hospital, FQHC, or RHC, and the amount of actual monies involved can’t be determined by the volume of referrals to the hospital, FQHC, or RHC. A record of the arrangement must be maintained for at least six years and be available to CMS during that time.
  2. Timeshare arrangements. This is a new exception for “timeshare” arrangements, where a visiting physician pays a hospital or physician organization for the right to use office space, equipment, and personnel periodically. Such timeshare arranges are already being used in rural or underserved areas where there just isn’t enough patient demand for specialists to support a single full-time practice. The timeshare arrangement exception is not the same as leasing agreements, which are already covered by an existing Stark exception, CMS writes in the PFS final rule. These existing lease arrangements remain unchanged in 2016, and the timeshare arrangement is simply a new option for providers and hospital groups.
    1. The space, equipment, and personnel must be used “predominantly to furnish evaluation and management (E/M) services to patients” according to CMS. The equipment included in the timeshare may not include advanced imaging equipment, radiation therapy equipment, or clinical or pathology laboratory equipment (other than those used for CLIA-waived tests).
    2. Like the new NPP exception, a timeshare arrangement must also be in writing, signed by all parties, and list in detail the space, equipment, personnel and other items being shared.
    3. Again, in keeping with longstanding Stark provisions, the compensation for timeshare arrangements can’t be based on the volume of referrals between the parties.

The PFS final rule also makes some clarifications to existing Stark language that will clarify some issues for hospitals and other large organizations, but don’t alter the compliance landscape nearly as much as the two new exceptions discussed above. This includes a definition revision that affects the NPP exception.

CMS is revising the definition for “geographic area served by an FHQC or RHC” for the existing Stark physician recruitment exception (and also the newly created NPP recruitment exception). The revision defines the geographic area served by an FQHC or RHC as “the lowest number of contiguous or noncontiguous ZIP codes from which the FQHC or RHC draws at least 90% of its patients, as determined on an encounter basis.” This is more specific than the current definition, which is the “area composed of the lowest number of contiguous ZIP codes from which the hospital draws at least 75% of its inpatients.

— Grant Huang, CPC, CPMA. The author is Director of Content at DoctorsManagement.