GOVERNMENTPercentage compensation part of Stark II rules postponedCMS attempts to fix a provision regarding a common hospital billing practice for independent contract physicians.By Tanya Albert, amednews 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. Some health care groups say the regulation needs to be defined so that only the payment methodology needs to be set in advance. Proponents of the wording change said the common arrangement is not one that the government intended to target in the self-referral laws. But, they say, the way the law is written could unintentionally trip up physicians if it is not changed. "It's a technical issue," said Ivy Baer, regulatory counsel for the Assn. of American Medical Colleges. The first phase of Stark II, named after its congressional sponsor, Rep. Fortney "Pete" Stark (D, Calif.), primarily affects physicians. It covers 10 services: physical therapy, occupational therapy, radiology, home health services, outpatient prescription drugs, radiation therapy services and supplies, durable medical equipment and supplies, inpatient and outpatient services, parenteral and enteral nutrients, and prosthetic devices and supplies. The second phase of Stark II is now expected to be published by July 2003, according to CMS. Those regulations will primarily affect hospitals. ADDITIONAL INFORMATION:WeblinkCMS notice in the Nov. 22 Federal Register regarding the delay of a portion of the Stark II rule's effective date (http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov/2002/02-29797.htm) Copyright 2002 American Medical Association. All rights reserved.
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