On November 20, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a final rule to modernize and clarify the regulations that interpret the Medicare physician self-referral law (often called the “Stark Law”), which has not been significantly updated since it was enacted in 1989. .

Under the Stark Law, a physician is prohibited from making referrals to an entity for healthcare services if the physician has a financial relationship with the entity. The regulations were intended to protect patients in a health care system that reimbursed providers on a fee-for-service basis. In this type of system, there is a motivation to provide more services.

The new final rule supports the CMS “Patients over Paperwork” initiative by reducing the unnecessary regulatory burdens on physicians and other healthcare providers while reinforcing the Stark Law’s goal of protecting patients from unnecessary services and being steered to less convenient, lower quality, or more expensive services because of a physician’s financial self-interest.

Through the Patients over Paperwork initiative, the final rule opens additional avenues for physicians and other healthcare providers to coordinate the care of the patients they serve – allowing providers across different healthcare settings to work together to ensure patients receive the highest quality of care.

In addition, as part of the Regulatory Sprint to Coordinated Care, CMS worked closely with the Department of Health and Human Services Office of Inspector General in finalizing policies that advance the transition to a value-based healthcare delivery and payment system that improves the coordination of care among physicians and other healthcare providers in both the federal and commercial sectors.

Healthcare Leadership Council President Mary Grealy said, “This should be recognized as one of the most important health policy achievements of recent years. We are moving toward an era in healthcare that recognizes the importance of care coordination and fully integrated care involving primary care providers, specialists, hospitals, pharmacies, drug and device manufacturers and more.”

Grealy continued, “These laws, as written, discouraged innovative patient-focused multi-sector collaborations at a time in which we should be enthusiastically encouraging them. What these new rules recognize is that we can protect patients from fraud and abuse while still allowing the healthcare system to evolve in a way that benefits patients and achieves greater cost-efficiency.“

It remains to be seen if regulators in California will follow this thinking in terms of regulating those involved in workers’ compensation medical delivery systems