Corporate Compliance

CMS issues Stark II Phase III final rules

Compliance Monitor, August 29, 2007

CMS issued the long-awaited Stark II Phase III final rules Monday and one of the biggest changes involves indirect compensation arrangements.

CMS will consider physicians to "stand in the shoes" of their practice group when determining whether a compensation arrangement is direct or indirect. The change closes a loophole in the definition of "indirect compensation arrangement" by treating compensation arrangements for designated health services between entities and group practices as if the arrangements are with the group's referring physicians. This change will not impact current arrangements.

The changes in the Stark Law will also

  • Eliminate the proposed safe harbor in Phase II within the fair market value of physician compensation
  • Expand the non-monetary compensation exception
  • Add three new regulatory definitions
  • Add an alternative 45-minute transportation time test to the intra-family rural referrals exception
  • Add a holdover provision in the exception for personal service arrangements
  • Expand the geographic area into which a rural hospital may recruit physicians

    Click here to read the complete rule.

Most Popular