The Centers for Medicare & Medicaid Services (CMS) is hoping to issue a proposed regulation by the end of the year that would loosen the “Stark law” prohibiting physician self-referral, CMS administrator Seema Verma said Monday.
“One of the barriers around [promoting] value-based care is burdensome regulations, and that’s where Stark comes into it,” Verma said at a briefing sponsored by the Alliance for Health Policy and APCO Worldwide, a public relations firm here. “We are going to do something on Stark — I’m very certain about that — and we hope to have something out by the end of the year.”
The 1989 law, named for former congressman Fortney H. “Pete” Stark (D-Calif.), “prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership, investment, or compensation), unless an exception applies,” CMS notes on its website.
Designated health services include clinical lab services, physical therapy, occupational therapy, radiology, durable medical equipment, home health services, outpatient prescription drugs, and inpatient and outpatient hospital services.
During a panel discussion following Verma’s remarks, Richard Deem, senior vice president for advocacy at the American Medical Association (AMA), pointed out that the Stark law “was created in a whole different environment than we’re trying to operate in now … Right now we’re talking about more collaboration, whether it’s an ACO [accountable care organization] or a bundled payment arrangement. Obviously we’re going to have to rethink things if we want to collaborate and coordinate.”
Verma also discussed other moves that CMS was making to lessen the regulation burden on providers. The agency had previously announced that it was doing away with some of the current quality measures for home healthcare and dialysis providers.
“We did a nationwide listening tour, and talked to providers from different settings across the system, and we heard about the burden of the reporting,” Verma told MedPage Today. “We went back and took a look at all of the measures.”
When they did so, they found that many quality measures were “topped out” — 97% or 98% of providers had a positive score on the measure — “so why are we continuing to report [on it]?” she said. “The other thing we saw is that a lot of the measures were duplicative; providers were having to report the same thing across three or four programs, so we’re trying to eliminate that.”
In addition, “we need to think about the burden it’s creating on the healthcare system,” Verma continued. Providers “are spending so much time and energy reporting, when what we need providers to do is focus on patients. I was visiting a hospital in Ohio and they talked about having 14 or 15 people essentially in the basement working on quality measures and manually having to extract data from patient records. We need people on the front lines, not in the back room behind a computer screen.”
Eventually, “we want to get to a system where we can extract information from medical records, from claims data. That’s the overall direction we’re going in on quality measurement,” she said.
There is a tension between having too many quality measures and having enough relevant measures, said the AMA’s Deem. “We want to get out of checking the boxes, but if they parse down the measures too much, it may leave some physicians without a measure they can properly use.”
As for using claims data to do quality measurement, “the problem with claims data is that it doesn’t include a lot of the clinical data that you need to make the proper quality judgments,” he added.
Verma also hinted that the agency might be moving toward “site-neutral” payments, in which all Medicare providers are paid the same for a particular procedure or service no matter where it was preformed. As it stands now, “we’re paying differently for the exact same service in one setting versus another, and the provider community is responding to that,” she said. “You see hospitals buying up physician practices because then they can bill more for the exact same service.”
The idea of site-neutral payments did not sit well with Joanna Hiatt Kim, vice president for payment policy at the American Hospital Association. “The cost of care delivered in hospitals and health systems reflects the unique social goods that only they provide,” she said.
That would include “providing for standby capacity should a rare traumatic event occur, staffing and keeping the ED open 24/7, so if your child gets sick in the middle of the night or if you’re a victim of a hurricane or an earthquake or a wildfire, you can come in and a hospital is ready to care for you … we would [oppose site-neutral payment].”
Verma also responded to a question about a recent court ruling that invalidated Kentucky’s Medicaid waiver, which would have imposed work requirements — also known as “community engagement” requirements — on able-bodied Medicaid recipients. “This administration is committed to giving states flexibility, to giving people living in poverty a pathway out of that situation,” said Verma, who noted that she had recused herself from the Kentucky case and couldn’t talk about it specifically.
“States are trying to do innovative things … and we want to be supportive of that. This hasn’t changed our commitment to helping people rise out of poverty.”
