Percentage compensation part of Stark II rules postponed

CMS attempts to fix a provision regarding a common hospital billing practice for independent contract physicians.

By Tanya Albert, AMNews staff. Dec. 16, 2002.

Debate over how federal self-referral regulations will handle situations in which hospitals, universities and other medical institutions pay physicians on a percentage basis will continue for another six months.

The Centers for Medicare & Medicaid Services has delayed for the second time the percentage-based compensation part of the physician self-referral law -- commonly known as Stark II. At this time last year, the government moved the effective date from January 2002 to January 2003 because changes weren't made in time.

But with modifications still in the works as the deadline approached, CMS pushed that portion of the rule's effective date back to July 7, 2003.

Physicians raised concerns that the wording in the original regulation could needlessly disrupt patient care, research and teaching.

"We understand that hospitals, academic medical centers, medical foundations and other health care entities would have to restructure or renegotiate thousands of physician contracts to comply with the language regarding percentage compensation arrangements," CMS said in the Nov. 22 Federal Register.

The regulation, a small portion of the 600 pages of the first phase of the Stark II rules published in January 2001, says certain financial arrangements need to be set in advance. That could bring into question a common arrangement among independent contract physicians in which the hospital pays them based on a set percentage of billings or collections, which makes their compensation fluctuate. [...]