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October 9, 2019

Stark law and Medicare executive order

Regulatory burden reduction on the horizon.
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CMS recently released a highly anticipated proposed rule to update and clarify the regulatory interpretation surrounding the physician self-referral law, also known as the Stark law. This law was created to address the conflict of interest involved in physicians and other health care providers referring patients to entities of which the physician has financial ties. 

The proposed rule aims to modernize the current version of the law by incorporating the evolution of the American health care delivery and payment system, fee-for-service to a value-based service framework and adopts CMS’ Patients’ over Paperwork principles. The proposed rule includes value-based compensation arrangement exceptions that would promote coordinated care efforts and allow providers across different health care settings to work together to ensure patients receive the highest quality of care. The proposal also seeks to reduce regulatory barriers by including updated compliance guidance for physicians, health care providers and suppliers whose financial relationship is directly impacted by this law. 

AGA welcomes these changes in the proposed rule, as they are long overdue in addressing the burdens faced by independent GI practices who aim to deliver high-quality, coordinated patient care. AGA has long advocated for these changes and has supported legislation, H.R. 2282, the Medicare Care Coordination Act, introduced by Rep. Raul Ruiz, D-CA, that would reform the Stark laws to allow for physician practices to participate in alternative payment models. AGA will submit comments and provide an additional analysis of this rule in the coming weeks.


President Trump issued an executive order to protect and strengthen Medicare for beneficiaries by expanding choices, access and lowering premiums. The president emphasized the need to protect and strengthen Medicare given the push with “Medicare for All” by many of the Democratic presidential candidates. Although several themes and principles were emphasized, many details were not unveiled and the implementation would need to be promulgated through the federal rulemaking process. Since the administration is fostering an environment to allow more Medicare Advantage plans to participate in Medicare, AGA hopes that patients and providers will be protected from overuse of prior authorization and step therapy that prevents patients from getting the care they need.

Key features of the executive order include:

  • Increasing the number of Medicare Advantage plans offered in Medicare and increase benefits the plans offer.
  • Increasing Telehealth especially in rural areas where access is critical.
  • Reducing provider burdens to allow them to spend more time with their patients.
  • Increasing access to new technologies by bridging the gap between FDA approval of technologies to reimbursement and coverage at CMS.
  • Implementing site neutrality to ensure beneficiaries are paying the same price for the same service regardless of setting.
  • Increasing transparency by encouraging use of data and other third-party tools.

AGA looks forward to seeing how these concepts will be implemented. While we appreciate the Administration’s emphasis on reducing physicians’ regulatory burden, we hope that this executive order will lead to the implementation of accountability of prior authorization that the Medicare Advantage plans are overutilizing —  impacting patients’ access to care. 

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