CMS Announces Extension on Publishing Final Rule Governing Physician Self-Referrals in Stark Law

 Health care providers looking for long-awaited answers to new proposed rules changes governing physician self-referral arrangements may have to wait a bit longer. The Centers for Medicare & Medicaid Services ("CMS") recently announced an extension of the timeline for publication of a Medicare final rule until August 31, 2021, citing the complexity of the issues raised by comments from the public.

On October 17, 2019, CMS had announced proposed new exceptions for the physician self-referral law (commonly known as the “Stark law”) for certain value-based compensation arrangements between or among physicians as well as proposed changes to existing exceptions and definitions. As we had reported last year, these proposed specific definitional changes included what constitutes “fair market value” and “commercial reasonableness.” The new rule also provided, e.g., a new exception for certain arrangements under which a physician receives limited remuneration for items or services actually provided by the physician and a new exception for donations of cybersecurity technology and related services; and amendments to the existing exception for electronic health records ("EHR") items and services.

At the same time, the Department of Health and Human Services’ ("HHS") Office of Inspector General ("OIG") also issued a proposed rule to add new value-based safe harbors and revise safe harbors under the federal anti-kickback statute ("AKS") and provide new exceptions to the civil monetary penalty law which prohibits inducements offered to patients. These changes, which we also reported on at the time, were the most significant changes to the rules since the enactment of the AKS, and would provide a host of new safe harbors.

The proposed rules set off a flurry or comments from health care industry leaders, which lasted through the end of the year. HHS has also issued waivers and policy statements indicating the intent not to impose administrative sanctions for certain financial arrangements during the COVID-19 pandemic.

In June 2020, CMS announced that a final rule would be published by the end of August. However, that deadline proved untenable. According to CMS, “we are still working through the complexity of the issues raised by comments received on the proposed [Stark law] rule and therefore we are not able to meet the announced publication target date.”

OIG, which is not under the same statutory obligation to announce extensions of its rule-making deliberation period, has not announced any extension of time in publishing its final rules. But given the coordination between OIG and CMS on the 2019 proposed rules, it is reasonable to expect that OIG will not release its final rules on AKS safe harbors before CMS announces its final rules.