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Although commenting on the Proposed Rule is closed, if finalized, the Proposed Rule would have a significant impact on the way hospitals and physicians structure future compensation arrangements.
In October 2019 the Centers for Medicare & Medicaid Services (CMS) released a much-anticipated proposed rule aimed at modernizing the federal Stark Law and its accompanying regulations.
The “Proposed Rule” is one component of the “Regulatory Sprint to Coordinated Care” initiative launched by the Department of Health and Human Services (HHS) and is intended to provide additional flexibility to health care providers as they continue to face the transition from volume to value. If finalized, the Proposed Rule would have a significant impact on the way hospitals and physicians structure future compensation arrangements.
Here are a few things healthcare executives should know about the Proposed Rule:
CMS proposed changes to the definitions of fair market value and commercial reasonableness. It also provided a “bright-line” test under what is commonly referred to as the “volume or value” standard and broadened the scope of what is considered an electronic health record (EHR) under Stark.
CMS proposed the following new exceptions:
In prior commentary, CMS was reluctant to allow parties to structure space leasing arrangements outside of the Rental of Office Space Exception. However, the Proposed Rule posited an expansion of which exceptions may be available to protect space leasing arrangements to the following three exceptions.
CMS proposed changes to the exclusive use requirement in the Rental of Office Space Exception. The updated exception would allow a tenant (and any other tenants operating in the same office space) to use the same office space so long as the landlord is excluded from the space.
CMS proposed expanding the current 90-day grace period for obtaining late signatures on written arrangements to also include a 90-day grace period for finalizing the written document itself. Note that the parties would still be required to comply with all other elements of the applicable exception, including any set in advance requirements.
Although the Proposed Rule is not final, solicited comments by the CMS are no longer being accepted.
This article is educational in nature and is not intended as legal advice. Always consult your legal counsel with specific legal matters.
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