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August 24, 2018: MGMA responds to CMS Physician Self-Referral Law Request for Information

Advocacy Letter - August 27, 2018

Medicare Payment Policies

August 24, 2018 
The Honorable Seema Verma 
Centers for Medicare & Medicaid Services  
Hubert H. Humphrey Building 
202 Independence Avenue, S.W., Room 445-G 
Washington, D.C. 20201 

Re: CMS-1720-NC, Request for Information Regarding the Physician Self-Referral Law 

Dear Administrator Verma, 

The Medical Group Management Association (MGMA) is pleased to submit the following responses to the Centers for Medicare & Medicaid Services’ (CMS’) Request for Information (RFI) on how the Physician Self-Referral (Stark) Law might be improved. We commend CMS for recognizing the need to remove unnecessary regulatory barriers to clinical and financial integration and for seeking stakeholder feedback on how this can be done.   

MGMA is the premier association for professionals who lead medical practices. Since 1926, through data, people, insights, and advocacy, MGMA empowers medical group practices to innovate and create meaningful change in healthcare. With a membership of more than 40,000 medical practice administrators, executives, and leaders, MGMA represents more than 12,500 organizations of all sizes, types, structures and specialties that deliver almost half of the healthcare in the United States. Our members work on a daily basis to ensure that the financial and administrative mechanisms within group practices operate efficiently so physician time and resources can be focused on patient care.  

Few, if any, federal regulations affect the structure and operation of physician group practices to the extent of the Stark Law. MGMA has worked with Congress and CMS for almost 30 years in repeated efforts to reduce regulatory burden. Unfortunately, those efforts have been highly frustrating; with each successive CMS rulemaking under the Stark Law, the regulatory scheme has become more complex, to the point where it is now virtually unfathomable to all but the most specialized attorneys and compliance consultants. Many smaller group practices simply cannot afford these resources, and in any group practice, each dollar devoted to them is a dollar diverted away from efforts to promote better patient care.  

While MGMA appreciates CMS’ efforts to remove unnecessary government obstacles to value-based payment reform, we recognize CMS has not been given the legislative authority to resolve fundamental problems with the Stark Law. Meaningful improvement of this rule requires congressional action, as any progress made to reform regulations implementing the statute will be undercut by the law’s strict liability regime and disproportionate penalty provisions.  

As part of our recommendations for improvements to the Stark Law, MGMA encourages CMS to work with Congress to discuss repealing or, at a minimum, significantly revising the compensation portion of the Stark Law. We encourage CMS to pursue legislative relief on this topic in the context of the new value-based care delivery and payment landscape and pledge our support for serious efforts in this direction. Until legislative reform is achieved, there are commonsense regulatory improvements that can be made. Specifically, CMS should develop policy to: 
  • Protect value-based payment arrangements. MGMA recommends CMS create a single, overarching compensation exception for alternative payment models (APMs) and innovative clinical and financial arrangements. We encourage CMS to work with the Department of Health & Human Services’ (HHS’) Office of the Inspector General (OIG) to create a companion safe harbor under the Anti-Kickback Statute. We do not recommend changes to the regulations implementing the Stark Law’s ownership ban.  
  • Remove regulatory barriers. To provide effective regulatory relief, CMS must standardize compliance requirements and eliminate the numerous conflicting requirements placed on healthcare providers. Though existing exceptions to the Stark Law’s prohibitions are numerous, they contain complex criteria and esoteric terminology that are subject to regulatory interpretation and factual determinations that open the door to inadvertent noncompliance, particularly in the context of innovative arrangements. Any action must be guided by administrative simplification, in line with CMS’—indeed, this Administration’s— repeatedly trumpeted focus on burden reduction and regulatory relief. 
  • Support the group practice model. In addition to changes in Stark Law regulations, it is important that the Administration maintain the flexibility needed to deliver care in the new healthcare system’s delivery environment. In particular, preservation of the Stark Law inoffice ancillary services exception is crucial to ensuring physicians can continue to provide coordination of care for patients. We seek assurances from CMS that any reform will account for physician group practices of all sizes and specialties and offer protection to all medical groups that participate in or contribute to innovative payment arrangements as a component of a larger entity.  

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