On Friday, November 20, CMS released final rules implementing many Stark Law changes first proposed in October 2019 (the “Final Rules”). This release comes despite earlier suggestions that these Final Rules may be delayed until sometime in 2021. Developed as part of the Regulatory Sprint to Coordinated Care program, the Final Rules represent CMS’s recognition that the healthcare delivery and payment environment has changed from the “fee-for-service” model under which the Stark Law was developed, and that, in their current Form, the Stark Law’s regulations  can impede the development of beneficial value-based relationships.

In its Friday press release, CMS identified four broad policies implemented under the Final Rules:

• Finalizing new, permanent exceptions for value-based arrangements that will permit physicians and other healthcare providers to design and enter into value-based arrangements.

• Finalizing additional guidance on key requirements of Stark Law exceptions to make it easier for physicians and other healthcare providers to make sure they comply with the law (e.g. clarification on the definition of “fair market value”).

• Finalizing other new exceptions to provide protection for non-abusive, beneficial arrangements between physicians and other healthcare providers (e.g. donations of cybersecurity technology).

• Reducing administrative burdens that drive up costs by taking money previously spent on administrative compliance and redirecting it to patient care.

In CMS’s view, the Final Rules include “a comprehensive package of reforms to modernize the regulations that interpret the Stark Law while continuing to protect the Medicare program and patients from bad actors” and will “support the necessary evolution of the American healthcare delivery and payment system.” It is clear that the changes implemented by the Final Rules offer physicians and other health care providers significant new business opportunities and may also call for a reevaluation of certain existing agreements in light of the new guidance. With one exception (relating to group practice profit shares), the Final Rules’ changes are to become effective January 19, 2021.