November 22, 2020
The Centers for Medicare & Medicaid Services (CMS) finalized changes to outdated federal regulations that have burdened health care providers with added administrative costs and impeded the health care system’s move toward value-based reimbursement. The Physician Self-Referral Law, also known as the “Stark Law,” generally prohibits a physician from sending a patient for many types of services to a provider that the physician owns, is employed by, or otherwise receives payment from—regardless of what that payment is for. The old federal regulations that interpret and implement this law were designed for a health care system that reimburses providers on a fee-for-service basis, where the financial incentives are to deliver more services. However, the 21st century American health care system is increasingly moving toward financial arrangements that reward providers who are successful at keeping patients healthy and out of the hospital, where payment is tied to value rather than volume.