NAHC Responds to Proposed Rule on Stark Law

WASHINGTON, D.C. (January 31, 2020)—The National Association for Home Care & Hospice (NAHC) recently responded to an invitation from the Centers for Medicare & Medicaid Services (CMS) to comment on a proposed rule regarding regulations governing physician self-referral rules. The proposed rule, Medicare Program: Modernizing and Clarifying the Physician Self-Referral Regulations, [84 Fed. Reg. 55766 (October 17, 2019)], is relevant because home health services are one of the designated health services subject to the Stark physician self-referral rules.

As a reminder, the Stark laws, originally passed in 1992 and updated and expanded in 1995, prohibit referral of a patient for designated health services to any entity in which the referring physician or a family member has a financial interest, which includes ownership, investment interests, and compensation. This law applies to any physician receiving payment from a federal program, including Medicare and Medicaid.

While NAHC generally supports the proposed rule, the organization is concerned that the proposed changes appear to provide an overt permission for physicians involved in certain value-based innovations to direct referrals of patients to particular preferred providers in the absence of a patient’s expressed preference for a different provider. This standard is in contrast to longstanding standards that include an obligation of a referring provider to support the freedom of choice mandate with an affirmative responsibility to supply patients with information of their right to choose, information about available choices, and an unencumbered path to exercising the choice made.

NAHC maintains that patient outcomes must be the central value measured. All other factors should take on a secondary role as an efficient cost of care will naturally result from care delivery that achieves the best outcome for patients. Therefore, NAHC submitted the following recommendations to CMS Administrator Seema Verma:

1. CMS should revise the proposed rule and maintain existing requirements that physicians fully honor the Freedom of Choice mandate though affirmative patient support with information on available choices and an unbridled path to exercising that choice.
2. Alternatively, CMS should require that physicians involved with value-based programs or entities so involved:

1. provide notice to patients that the physician is participating in a financial risk-based program wherein the physician or an entity with a financial relationship with the physician receives financial benefits under applicable conditions;
2. provide notice to patients indicating that referrals for care may be made to a restricted list of providers and practitioners;
3. provide notice to patients that they have the freedom to choose any qualified provider or practitioner and the right to reject any referral to a particular provider or practitioner if they have an alternative preferred provider or practitioner; and
4. be prohibited from taking any adverse action against a patient that chooses an alternative provider or practitioner.

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