Centers for Medicare & Medicaid Services Administrator Seema Verma recently announced plans to convene an inter-agency working group to minimize barriers created by the Stark Law. This is an outdated law enacted 30 years ago that now presents significant barriers to independent physicians who are preparing for our health care system’s shift from fee-for-service to value-based care.
While Verma’s action is a step in the right direction, Congressional action is needed for the meaningful changes necessary that will enable independent physicians to provide the best possible care for Medicare patients.
MACRA prioritizes advanced alternative payment models (APMs) that encourage care coordination (and under which physicians accept some risk for patient outcomes and cost). Unfortunately, the Stark Law presents serious challenges for independent physicians who are attempting to create these types of APMs.
The Stark Law, enacted in the fee-for-service era, sought to bar physicians from referring Medicare patients to hospitals, labs and other entities if they would benefit financially from the patient receiving care in those facilities.
While curbing physician self-referral might have seemed reasonable in that health care environment, its prohibition on compensation models that consider and compensate for volume or value is one of the main reasons that only about five percent of physicians are participating in APMs.
If physicians cannot reward greater value or less volume (when appropriate), how can we participate and facilitate the changes needed to transform and modernize our healthcare system?
Addressing the prohibitions that hinder medical practices from rewarding physicians for following best clinical practices or penalizing those who fail to follow treatment protocols will lead to better patient outcomes. The U.S. Department of Health and Human Services (HHS) agrees — recently reporting to Congress that the Stark Law poses a significant barrier to developing important care delivery models.
Congress can address the concerns raised in the HHS report by passing bipartisan legislation that seeks to modernize the Stark Law. The Medicare Care Coordination Improvement Act of 2017 maintains the consumer protections that are the main tenets of the Stark Law, while providing doctors with the flexibility to improve care coordination through alternative payment models.
This legislation is supported by the Digestive Health Physicians Association and 23 other physician organizations representing more than 500,000 physicians who care for millions of Medicare patients.
Congress has recognized the barriers to care coordination created by the Stark Law. When Congress passed the Affordable Care Act in 2010, HHS was authorized to waive the self-referral and anti-kickback prohibitions for accountable care organizations (mostly hospital-led entities) that attempted to coordinate care for about nine million Medicare beneficiaries.
The 2017 bill would provide HHS the same authority to waive restrictions in the Stark Law for independent physician practices seeking to develop and operate APMs.
The contributions of independent physician practices are crucial to lowering healthcare costs. Prohibitions on their participation in APMs that improve care coordination could drive patients into the more expensive hospital-based setting.
A recent analysis from Avalere Health found that hospital-employed physicians performed more services in costlier hospital outpatient settings, resulting in up to 27 percent higher costs for Medicare and 21 percent higher costs for patients.
Modernizing the Stark Law is crucial to realizing Congress’ goal of shifting the Medicare program from a fee-for-service payment system to a structure that rewards care coordination.
Allowing physicians in independent medical practices to participate in value-based payment arrangements will increase access and quality, while lowering the cost of care for Medicare patients. Indeed, it is essential to the success of MACRA itself.
Fred Rosenberg, M.D. is a board-certified gastroenterologist and the medical director of the North Shore Endoscopy Center, president of Illinois Gastroenterology Group, and president and chairman of the board of directors of the Digestive Health Physicians Association.