Health care institutions waiting for the “Stark Law” to be brought into the 21st century will have to wait a little longer as it was announced that the new deadline for reform was set for August 31, 2021, a year later than initially promised. Reform would allow independent physicians to implement fully value-based payment models. Officials have said that reform was important last year, the COVID-19 pandemic only making it more significant.
Enacted in a time where most of the health care system relied on a fee-for-service payment model, the “Stark Law” (named for late congressman Fortney H. Stark) prohibits physicians 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.
The health care system has since involved to emphasize “value-based care”, providing incentives based on value as opposed to volume. Clinicians and hospital groups have argued that the law hampers value-based payment models and makes patient care coordination more difficult.
What’s causing the delay?
Centers for Medicare & Medicaid Services (CMS) published the notice extending the deadline until 2021 stating that it is still working through the complexity of the issues raised by comments received on the proposed rule and would not be able to meet the initial deadline. Uncertainty whether this will be the final solution is the main issue and it hasn’t been made any easier amid a global health crisis. CMS has said that they are working hard to finalize the rules for Stark Law reform.