CMS Stark III Regulations Now Available

Today CMS released the final Stark III physician self-referral rule available on the Physician Self Referral section of the CMS website and will be published in the September 5 Federal Register. 516 pages of light health care regulatory reading for the Labor Day Holiday.

The Phase III Stark Final Rule (CMS-1810-F) is officially titled, "Medicare Program; Physicians' Referrals to Health Care Entities With Which They Have Financial Relationships (Phase III)". The regulations will be effective 90 days after the publication date which is expected to be September 5, 2007. Read the CMS press release.

UPDATE: CMS has also provided an unofficial redline version of the Stark regulations showing the existing regulations and incorporating in the new Stark III changes.

UPDATE (7/5/07): The official version was published in the Federal Register on September 5, 2007. A complete copy of the regulations can be found here. The effective date of Phase III Final Rule is December 4, 2007.

UPDATE (11/11/07): David Harlow reports that certain provisions of Stark III will be delayed for up to a year (December 4, 2008).

Below is a copy of the rule summary and the table of contents directly from the final rule:

Summary: This final rule is the third phase (Phase III) of a final rulemaking amending our regulations regarding the physician self-referral prohibition in section 1877 of the Social Security Act (the Act). Specifically, this rule finalizes, and responds to public comments regarding, the Phase II interim final rule with comment period published on March 26, 2004, which set forth the self-referral prohibition and applicable definitions, interpreted various statutory exceptions to the prohibition, and created additional regulatory exceptions for arrangements that do not pose a risk of program or patient abuse (69 FR 16054).

In general, in response to public comments, in this Phase III final rule, we have reduced the regulatory burden on the health care industry through the interpretation of statutory exceptions and modification of the exceptions that were created using the Secretary’s discretionary authority under section 1877(b)(4) of the Act to promulgate exceptions for financial relationships that pose no risk of program or patient abuse.

I. Background
II. General Comments
A. General
B. Compliance with the Anti-kickback Statute
III. Definitions--§411.351
A. Employee
B. Entity
C. Fair Market Value
D. “Incident to” Services
E. Physician in the Group Practice
F. Radiology and Certain Other Imaging Services and Radiation Therapy
G. Referral
H. Rural Area
IV. Group Practice--§411.352
V. Prohibition on Certain Referrals by Physicians and Limitations on Billing--§411.353
VI. Financial Relationship, Compensation, and Ownership or
Investment Interest--§411.354
A. Ownership
B. Compensation
C. Special Rules on Compensation
VII. General Exceptions to the Referral Prohibition Related
to Both Ownership/Investment and Compensation--
§411.355
A. Physician Services
B. In-office Ancillary Services
C. Services Furnished by an Organization (or Its Contractors or Subcontractors) to Enrollees
D. Reserved
E. Academic Medical Centers
F. Implants Furnished by an Ambulatory Surgical Center
G. EPO and Other Dialysis-related Drugs Furnished in or by an End-Stage Renal Dialysis Facility
H. Preventive Screening Tests, Immunizations, and Vaccines
I. Eyeglasses and Contact Lenses Following Cataract Surgery
J. Intra-family Rural Referrals
VIII. Exceptions to the Referral Prohibition Related to
Ownership or Investment Interests--§411.356
A. Publicly-traded Securities and Mutual Funds
B. Hospitals Located in Puerto Rico
C. Rural Providers
D. Ownership Interest in a Whole Hospital
IX. Exceptions to the Referral Prohibition Related to
Compensation Arrangements--§411.357
A. Rental of Office Space
B. Rental of Equipment
C. Bona Fide Employment Relationships
D. Personal Service Arrangements
E. Physician Recruitment
F. Isolated Transactions
G. Remuneration Unrelated to Designated Health Services
H. Group Practice Arrangements with a Hospital
I. Payments by a Physician
J. Charitable Donations by a Physician
K. Nonmonetary Compensation
L. Fair Market Value Compensation
M. Medical Staff Incidental Benefits
N. Risk-sharing Arrangements
O. Compliance Training
P. Indirect Compensation Arrangements
Q. Referral Services
R. Obstetrical Malpractice Insurance Subsidies
S. Professional Courtesy
T. Retention Payments in Underserved Areas
U. Community-wide Health Information Systems
X. Reporting Requirements--§411.361
XI. Miscellaneous (Other)
XII. Provisions of the Final Rule
XIII. Technical Corrections
XIV. Collection of Information Requirements
XV. Regulatory Impact Analysis
A. Overall Impact
B. Anticipated Effects
C. Alternatives Considered

Comments on the new regulations:

• Brian Peterson at his West Virginia Legal Weblog provides insight into the new regulations clarification of physician recruitment agreements and restrictive covenants in physician employment agreements.
  

Thanks to the AHLA Stark Law listserve for the tip on the final rule.