Co-authored by Cecilia G. Vazquez, Summer Law Clerk, Breazeale, Sachse & Wilson, L.L.P.

Depending on how a Texas federal court rules in a lawsuit filed February 2018, by 20 state attorneys general (including Louisiana), all or part of the Affordable Care Act (ACA) could be declared unconstitutional. On June 7, 2018, the Justice Department filed a brief in Texas v. the United States (N.D. Texas 2018) (the “Texas lawsuit”) that largely supported the challenge to the constitutionality of the Individual Mandate in the ACA requiring individuals to maintain essential health insurance coverage. Continue reading →

The Centers for Medicare & Medicaid Services (“CMS”) is seeking public feedback regarding the regulatory impact and burdens of the Physician Self-Referral Law (commonly known as the “Stark Law”). On Monday, June 25th, CMS published in the Federal Register a Request for Information Regarding the Physician Self-Referral Law (the “RFI”). According to the RFI, CMS has identified some aspects of the Stark Law as a potential barrier to coordinated care and is seeking public comment on the impact and burden of the Stark Law and whether the Stark Law prevents or inhibits care coordination.

CMS plans to issue guidance or revise regulations to address obstacles such as certain portions of the Stark Law, as well as to encourage and incentivize coordinated care. In the RFI, CMS has asked for stakeholders’ comments on the following areas:

• The structure of arrangements between parties that participate in alternative payment models or other novel financial arrangements;
• The need for revisions or additions to exceptions to the Stark Law; and
• Certain terminology used in the context of healthcare delivery, payment reform, and the Stark Law.

In the RFI, CMS asked for public feedback on 20 questions that address the above areas. Some of the areas and questions include:

1. What existing or potential arrangements involving alternative payment models do you participate in that involve a designated health services entity and referring physician under the Stark Law;
2. What, if any, additional exceptions to the Stark Law are necessary to protect financial arrangements that involve integrating and coordinating care outside of an alternative payment model;
3. Whether the current exception at 42 CFR 411.357(n) for risk-sharing arrangements is effective;
4. Whether the special rule for compensation under a physician incentive plan within the exception for personal services arrangements is useful;
5. Comments on possible approaches to addressing the application of the Stark Law to financial arrangements with participants in alternative payment models.
6. How should the CMS define commercial reasonableness in the context of the Stark Law;
7. Whether the CMS should modify the definition of “fair market value”;
8. When compensation should be considered to “take into account the volume or value of referrals” by a physician or “take into account business generated” between parties to an arrangement;
9. Whether barriers exist to qualifying as a “group practice”;
10. Whether transparency about physician’s financial relationships, price transparency or the availability of other data necessary for informed consumer purchasing could reduce or eliminate the harms to the Medicare program and its beneficiaries that the Stark Law is intended to address; and
11. What are the compliance costs for regulated entities, such as physician practices and hospitals.

Any comments and feedback to CMS in response to the Request for Information on the Stark Law must be received by CMS by 5:00 p.m. on August 24, 2018. A copy of the CMS RFI is available here.

Written by: Clay Countryman

As reported in last month’s LHA article, Blue Valley Hospital (“BVH”) recently filed a lawsuit seeking to restrain and enjoin the United States Department of Health and Human Services (“HHS”) and the Centers for Medicare & Medicaid Services (“CMS”) from terminating BVH’s Medicare certification and provider contracts. In the lawsuit filed with the United States District Court for the District of Kansas (“Kansas District Court”), BVH argued that if the Temporary Restraining Order (“TRO”) and injunction were not granted, BVH would lose nearly all of its revenue while the administrative appeal was pending, which would force BVH to close and would result in irreparable harm. At the time of the prior article, it was unclear how the Court would rule and whether the BVH Medicare provider agreement would be terminated.

On June 7, 2018, the Kansas District Court dismissed the BVH case for lack of subject matter jurisdiction because BVH had not exhausted its administrative remedies. BVH’s Medicare provider agreement was subsequently terminated by CMS in a Public Notice of Termination effective June 15, 2018. Hospitals should carefully analyze the requirements to be “primarily engaged” that are summarized below, and make any necessary adjustments to meet those requirements prior to the arrival of surveyors. As the BVH case illustrates, the administrative process can be slow and the courts are not likely to grant injunctive relief to protect against termination of a hospital’s provider agreement while the hospital pursues its administrative remedies. Continue reading →