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Stark Regulations Changes are Finalized in the 2016 Medicare Physician Fee Schedule

On October 29, 2015, the Centers for Medicare & Medicaid Services (“CMS”) released the final 2016 Medicare Physician Fee Schedule (the “Final Rule”) with few changes between the proposed rule and final rule as it related oney and Pen to the Stark provisions. The Final Rule was published in the Federal Register on November 5, 2015. These are the first major changes to the Physician Self-Referral Rule (Stark Law) since 2009.

CMS stated that the Stark Law updates are meant to support:

• health care delivery/payment system reform,
• reduce burdens,
• facilitate compliance,
• clarify certain applications of the Stark Law,
• and issue new Stark exceptions.

Geographic Area Definition Changes: The only change from the Proposed Rule is the addition of a definition for the geographical area serviced by the FQHCs and RHCs, which is: ‘The “geographic area served” by a federally qualified health center or a rural health clinic is the area composed of the lowest number of contiguous or noncontiguous zip codes from which the federally qualified health center or rural health clinic draws at least 90 percent of its patients, as determined on an encounter basis. The geographic area served by the federally qualified health center or rural health clinic may include one or more zip codes from which the federally qualified health center or rural health clinic draws no patients, provided that such zip codes are entirely surrounded by zip codes in the geographic area described above from which the federally qualified health center or rural health clinic draws at least 90 percent of its patients.™

Significant clarifications made in the Physician Fee Schedule: There are also other changes which define exceptions, relax certain technical requirements and clarify or further define existing regulations. The changes include:

1. Revision of the Physician Recruitment Exception / geographic area served
2. “Takes into Account” referrals language standardized
3. Retention Payment Percentage Clarified
4. Stark Exception for Lease Arrangements Clarified
5. Holdover lease Arrangement Period Defined
6. Exception for Remuneration Defined
7. “Stand in the Shoes” language Clarified
8. Publicly traded securities definition Expanded
9. Timeshare lease Exception added
10. Hospital disclosure requirement language clarified

We have updated the Corporate Compliance course to include these important changes in the law. If you have any additional questions about our Corporate Compliance or Fraud, Waste and Abuse, training, please do not hesitate to contact one of our professional consultants.

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