CMS modernizes Stark Law

 - 
Monday, November 23, 2020

WASHINGTON – CMS has finalized a number of changes to the Stark Law, including new permanent exemptions for value-based arrangements, in a 627-page final rule set to be published in the Federal Register on Dec. 2. 

The exemptions will allow physicians and other health care providers to design and enter into value-based arrangements without fear that legitimate activities to coordinate and improve the quality of care for patients and lower costs would violate the physician self-referral law, CMS says. 

“When we kicked off our Patients Over Paperwork initiative in 2017, we heard repeatedly from front-line providers that our outdated Stark regulations saddled them with costly administrative burdens and hindered value-based payment arrangements,” said CMS Administrator Seema Verma. “That sound you hear is the mingled cheers and exclamations of relief from doctors and other health care professionals across the country, as we lift the weight of our punishing bureaucracy from their backs.” 

CMS published a request for information in June 2018 seeking input from stakeholders about how to address regulatory barriers to a value-based health care payment and delivery system under the Stark Law. The agency then published a proposed rule in October 2019 proposing sweeping reforms of the regulations that interpret the Stark Law. 

Other changes to the Stark Law include: 

  • Finalizing additional guidance on key requirements of the exceptions to the physician self-referral law to make it easier for physicians and other health care providers to make sure they comply with the law. 
  • Finalizing protection for non-abusive, beneficial arrangements that apply regardless of whether the parties operate in a fee-for-service or value-based payment system, such as cybersecurity technology that safeguards the integrity of the health care ecosystem. 
  • Reducing administrative burdens that drive up costs by taking money previously spent on administrative compliance and redirecting it to patient care. 


Unless specified in the rule, all of the changes go into effect 60 days from the rule being published in the Federal Register.