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Final Stark Rule Changes Delayed

on Wednesday, 9 September 2020 in Health Law Advisory: Zachary J. Buxton, Editor

In October of 2019, the Centers for Medicare and Medicaid Services (“CMS”) and the Office of Inspector General, U.S. Department of Health and Human Services (“OIG”) issued proposed rule changes to the Stark and federal Anti-Kickback Statute (“AKS”), respectively, that put forth many helpful updates intended to encourage and advance coordinated care efforts between hospitals and physicians and provide additional exceptions and safe harbors addressing many historical issues related to “technical non-compliance.” The proposed changes were touted as part of the Trump administration’s “Regulatory Sprint to Coordinated Care” and “Patients Over Paperwork” initiatives. Comments on the proposed rules were due by December 31, 2019.

Thereafter, CMS established and publicized an internal deadline of August 2020 by which it intended to finalize changes to the Stark rules. Given CMS’s own internal regulatory work plan along with a widely held belief that the Trump administration wanted to finalize the modifications prior to the election as further evidence of his accomplishments related to the lessening of regulatory burdens, many expected the changes to be finalized any day.

However, on August 27, 2020, CMS published notice that it was formally extending the deadline for finalizing the Stark rule changes to August 31, 2021. In doing so, CMS stated that the delay was due to “the complexity of issues raised by comments received on the proposed rule.” Given the complexity of Stark and AKS, this statement comes as no surprise. Nonetheless, many in the industry continue to believe that CMS and the OIG will publish final rules in the near future, with the delay being only temporary. In fact, final rules were submitted to the Office of Management and Budget on July 21st.  Nonetheless, these developments are (i) confirmation that the rule changes are and will continue to be complex, and (ii) an indication that there may be a number of substantive changes to and differences between the proposed and final rules. Regardless of when the final rules are issued, it is important to remember that the preamble to the proposed rules did contain a number of helpful comments from CMS and the OIG interpreting existing rules, which will continue to be helpful going forward.

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