[Federal Register Volume 83, Number 122 (Monday, June 25, 2018)]
[Proposed Rules]
[Pages 29524-29527]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-13529]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 411

[CMS-1720-NC]
RIN 0938-AT64


Medicare Program; Request for Information Regarding the Physician 
Self-Referral Law

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Request for information.

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SUMMARY: This request for information seeks input from the public on 
how to address any undue regulatory impact and burden of the physician 
self-referral law.

DATES: Comment Date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
on August 24, 2018.

ADDRESSES: In commenting, refer to file code CMS-1720-NC. Because of 
staff and resource limitations, we cannot accept comments by facsimile 
(FAX) transmission.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1720-NC, P.O. Box 8013, 
Baltimore, MD 21244-8013.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-1720-NC, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Lisa O. Wilson, (410) 786-8852.

SUPPLEMENTARY INFORMATION: 
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following 
website as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that website to 
view public comments.

I. Introduction

    The Department of Health and Human Services (HHS) is working to 
transform the healthcare system into one that pays for value. Care 
coordination is a key aspect of systems that deliver value. Removing 
unnecessary government obstacles to care coordination is a key priority 
for HHS. To help accelerate the transformation to a value-based system 
that includes care coordination, HHS has launched a Regulatory Sprint 
to Coordinated Care, led by the Deputy Secretary. This Regulatory 
Sprint is focused on identifying regulatory requirements or 
prohibitions that may act as barriers to coordinated care, assessing 
whether those regulatory provisions are unnecessary obstacles to 
coordinated care, and issuing guidance or revising regulations to 
address such obstacles and, as appropriate, encouraging and 
incentivizing coordinated care.
    The Centers for Medicare & Medicaid Services (CMS) has made 
facilitating coordinated care a top priority and seeks to identify ways 
in which its regulations may impose undue burdens on the healthcare 
industry and serve as obstacles to coordinated care and its efforts to 
deliver better value and care for patients. Through internal discussion 
and input from external stakeholders, CMS has identified some aspects 
of the physician self-referral law as a potential barrier to 
coordinated care. Addressing unnecessary obstacles to coordinated care, 
real or perceived, caused by the physician self-referral law is one of 
CMS's goals in this Regulatory Sprint. To inform our efforts to assess 
and address the impact and burden of the physician self-referral law, 
including whether and, if so, how it may prevent or inhibit care 
coordination, we welcome public comment on the physician self-referral 
law and, in particular, comment on the questions presented in this 
Request for Information (RFI).

II. Background

    When enacted in 1989, the physician self-referral law (section 1877 
of the Social Security Act), also known as the

[[Page 29525]]

``Stark Law,'' addressed the concern that health care decision making 
can be unduly influenced by a profit motive. When physicians have a 
financial incentive to refer patients for health care services, this 
incentive may affect utilization, patient choice, and competition. 
Overutilization may occur when items and services are ordered that 
would not have been ordered absent a profit motive. A patient's choice 
can be affected when he or she is steered to less convenient, lower 
quality, or more expensive providers of health care that are sharing 
profits with, or providing other remuneration to, the referring 
practitioner. Where referrals are controlled by those sharing profits 
or receiving other remuneration, the medical marketplace suffers since 
new competitors may have more difficulty generating business on 
superior quality, service, or price alone.
    By design, the physician self-referral law is intended to 
disconnect a physician's health care decision making from his or her 
financial interests in other health care providers and suppliers. 
Specifically, the law: (1) Prohibits a physician from making referrals 
for certain designated health services (DHS) payable by Medicare to an 
entity with which he or she (or an immediate family member) has a 
financial relationship (ownership or compensation), unless an exception 
applies; and (2) prohibits the entity from filing claims with Medicare 
(or billing another individual, entity, or third party payer) for those 
referred services. The prohibitions are absolute unless the physician's 
referral is permitted under an enumerated exception. The statute 
establishes a number of specific exceptions, and grants the Secretary 
the authority to create regulatory exceptions for financial 
relationships that do not pose a risk of program or patient abuse. For 
more information, please refer to the CMS physician self-referral 
website at https://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/index.html?redirect=/PhysicianSelfReferral/.
    CMS is aware of the effect the physician self-referral law may have 
on parties participating or considering participation in integrated 
delivery models, alternative payment models, and arrangements to incent 
improvements in outcomes and reductions in cost. The President's Budget 
for fiscal year (FY) 2019 included a legislative proposal to establish 
a new exception to the physician self-referral law for arrangements 
that arise due to participation in alternative payment models. In 
addition to this legislative proposal, CMS has engaged stakeholders 
through comment solicitations in several recent rulemakings. In 2017, 
through the annual payment rules, CMS asked for comments on 
improvements that can be made to the health care delivery system that 
reduce unnecessary burdens for clinicians, other providers, and 
patients and their families. In response, commenters shared additional 
information regarding the barriers to participation in health care 
delivery and payment reform efforts, both public and private, as well 
as the burdens of compliance with the physician self-referral law and 
our regulations as they exist today. As a result of our review of these 
comments, and with a goal of reducing regulatory burden and dismantling 
barriers to value-based care transformation, while also protecting the 
integrity of the Medicare program, we are requesting additional 
information in this RFI. We are particularly interested in your 
thoughts on issues that include, but are not limited to, 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 physician self-referral law, and 
terminology related to alternative payment models and the physician 
self-referral law. We look forward to receiving your input on this RFI.

III. Request for Information

    We are requesting public input on the following areas:
    1. Please tell us about either existing or potential arrangements 
that involve DHS entities and referring physicians that participate in 
alternative payment models or other novel financial arrangements, 
whether or not such models and financial arrangements are sponsored by 
CMS. Please include a description of the alternative payment model(s) 
and novel financial arrangements if not sponsored by CMS. We recommend 
that you identify concerns regarding the applicability of existing 
exceptions to the physician self-referral law and/or the ability of the 
arrangements to satisfy the requirements of an existing exception, as 
well as the extent to which the physician self-referral law may be 
impacting commercial alternative payment models and novel financial 
arrangements. Please be specific regarding the terms of the 
arrangements with respect to the following:
     The categories/types of parties (for example, the parties 
are a hospital and physician group with downstream payments to 
individual physicians in the group).
     Which parties bear risk (and how and to what extent) under 
the arrangement (for example, per capita payments from a payor are paid 
to a hospital with downstream payments on a discounted fee schedule to 
individual physicians; a bundled payment from a payor for all hospital 
and physician services is split between a hospital and physicians based 
on a predetermined percentage; hospital-sponsored gainsharing program 
where participating physicians share in cost savings; physician 
incentive payments are available for achieving predetermined metrics; 
etc.).
     The scope of the arrangement (for example, non-Medicare 
beneficiaries only, Medicare beneficiaries only, or all patients 
regardless of payor).
     The timeframe of the arrangement (for example, ongoing or 
for a duration that aligns with a payor-specific initiative).
     Items and services provided under the arrangement and by 
whom (for example, infrastructure, such as electronic health records 
technology; physician services; care coordination services; etc.).
     How the arrangement furthers the purpose of the 
alternative payment model or novel financial arrangement.
     Whether and, if so, how the arrangement mitigates the 
financial incentives for inappropriate self-referrals, and/or 
overutilization of items and services, and patient choice.
    2. What, if any, additional exceptions to the physician self-
referral law are necessary to protect financial arrangements between 
DHS entities and referring physicians who participate in the same 
alternative payment model? Specifically--
     What additional exceptions are necessary to protect 
accountable care organization models?
     What additional exceptions are necessary to protect 
bundled payment models?
     What additional exceptions are necessary to protect two-
sided risk models in a FFS environment?
     What additional exceptions are necessary to protect other 
payment models (please explain the nature and design of such models)?
     How (if at all) should a new exception (or exceptions) 
protect individual DHS referrals (see 42 CFR 411.355), ownership or 
investment interests (see 42 CFR 411.356), or compensation arrangements 
(see 42 CFR 411.357)?
    3. What, if any, additional exceptions to the physician self-
referral law are necessary to protect financial arrangements that 
involve integrating

[[Page 29526]]

and coordinating care outside of an alternative payment model? 
Specifically, what types of financial arrangements and/or remuneration 
related to care integration and coordination should be protected and 
why? How (if at all) should a new exception (or exceptions) protect 
individual DHS referrals (see 42 CFR 411.355), ownership or investment 
interests (see 42 CFR 411.356), or compensation arrangements (see 42 
CFR 411.357)?
    4. Please share your thoughts on the utility of the current 
exception at 42 CFR 411.357(n) for risk-sharing arrangements.
    5. Please share your thoughts on the utility of the special rule 
for compensation under a physician incentive plan within the exception 
at 42 CFR 411.357(d) for personal service arrangements.
    6. Please share your thoughts on possible approaches to address the 
application of the physician self-referral law to financial 
arrangements among participants in alternative payment models and other 
novel financial arrangements. Consider the following:
     Would a single exception provide sufficient protection for 
all types of financial arrangements?
     Would a multifaceted approach that amends existing 
exceptions and/or establishes new exceptions be preferable?
     Would such a multifaceted approach sufficiently allow 
parties to identify and satisfy the requirements of one (or more) 
applicable exceptions in order to protect individual DHS referrals, 
ownership or investment interests, and/or compensation arrangements?
    7. In the context of health care delivery, payment reform, and the 
physician self-referral law, please share your thoughts on definitions 
for critical terminology such as--

 Alternative payment model
 Care coordination
 Clinical integration
 Financial integration
 Risk
 Risk-sharing
 Physician incentive program
 Gainsharing
 Health plan
 Health system
 Integrated delivery system
 Enrollee

    8. Please identify and suggest definitions for other terminology 
relevant to the comments requested in this RFI.
    9. Please share your thoughts on possible approaches to defining 
``commercial reasonableness'' in the context of the exceptions to the 
physician self-referral law.
    10. Please share your thoughts on possible approaches to modifying 
the definition of ``fair market value'' consistent with the statute and 
in the context of the exceptions to the physician self-referral law.
    11. Please share your thoughts on when, in the context of the 
physician self-referral law, compensation should be considered to 
``take into account the volume or value of referrals'' by a physician 
or ``take into account other business generated'' between parties to an 
arrangement. Please share with us, by way of example or otherwise, 
compensation formulas that do not take into account the volume or value 
of referrals by a physician or other business generated between 
parties.
    12. Please share your thoughts on when, in the context of 
alternative payment models and other novel financial arrangements, 
compensation should be considered to ``take into account the volume or 
value of referrals'' by a physician or ``take into account other 
business generated'' between parties to an arrangement. Please share 
with us, by way of example or otherwise, compensation formulas that do 
not take into account the volume or value of referrals by a physician 
or other business generated between parties.
    13. Please share your thoughts regarding whether and, if so, what 
barriers exist to qualifying as a ``group practice'' under the 
regulations at 42 CFR 411.352.
    14. Please share your thoughts on the application and utility of 
the current exception at 42 CFR 411.357(g) for remuneration unrelated 
to DHS. Specifically, how could CMS interpret this exception to cover a 
broader array of arrangements?
    15. Please identify any provisions, definitions, and/or exceptions 
in the regulations at 42 CFR 411.351 through 411.357 for which 
additional clarification would be useful.
    16. Please share your thoughts on the role of transparency in the 
context of the physician self-referral law. For example, if provided by 
the referring physician to a beneficiary, would transparency about 
physician's financial relationships, price transparency, or the 
availability of other data necessary for informed consumer purchasing 
(such as data about quality of services provided) reduce or eliminate 
the harms to the Medicare program and its beneficiaries that the 
physician self-referral law is intended to address?
    17. Please share your thoughts on whether and how CMS could design 
a model to test whether transparency safeguards other than those 
currently contained in the physician self-referral law could 
effectively address the impact of financial self-interest on physician 
medical decision-making.
    18. Please share your thoughts on the compliance costs for 
regulated entities.
    19. Please identify any recent studies assessing the positive or 
negative effects of the physician self-referral law on the healthcare 
industry. To the extent publicly available, please provide a copy of 
the study(ies).
    20. Please share your thoughts regarding whether CMS should measure 
the effectiveness of the physician self-referral law in preventing 
unnecessary utilization and other forms of program abuse relative to 
the cost burden on the regulated industry and, if so, how CMS could 
estimate this.
    Respondents are encouraged to provide complete but concise and 
organized responses, including any relevant data and specific examples. 
However, respondents are not required to address every issue or respond 
to every question discussed in this RFI to have their responses 
considered. In accordance with the implementing regulations of the 
Paperwork Reduction Act at 5 CFR 1320.3(h)(4), all responses will be 
considered provided they contain information CMS can use to identify 
and contact the commenter, if needed.
    Please note, this is a request for information only. As previously 
stated, respondents are encouraged to provide complete but concise 
responses. This RFI is issued solely for information and planning 
purposes; it does not constitute a Request for Proposal (RFP), 
application, proposal abstract, or quotation. This RFI does not commit 
the U.S. Government to contract for any supplies or services or make a 
grant award. Further, CMS is not seeking proposals through this RFI and 
will not accept unsolicited proposals. Respondents are advised that the 
U.S. Government will not pay for any information or administrative 
costs incurred in response to this RFI; all costs associated with 
responding to this RFI will be solely at the interested party's 
expense. Not responding to this RFI does not preclude participation in 
any future procurement, if conducted. It is the responsibility of the 
potential responders to monitor this RFI announcement for additional 
information pertaining to this request. Please note that CMS will not 
respond to questions about the policy issues raised in this RFI. CMS 
may or may not

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choose to contact individual responders. Such communications would only 
serve to further clarify written responses. Contractor support 
personnel may be used to review RFI responses.
    Responses to this RFI are not offers and cannot be accepted by the 
U.S. Government to form a binding contract or issue a grant. 
Information obtained as a result of this RFI may be used by the U.S. 
Government for program planning on a non-attribution basis. Respondents 
should not include any information that might be considered proprietary 
or confidential. This RFI should not be construed as a commitment or 
authorization to incur costs for which reimbursement would be required 
or sought. All submissions become U.S. Government property and will not 
be returned. CMS may publicly post the comments received, or a summary 
thereof.

IV. Collection of Information Requirements

    This document does not impose information collection requirements, 
that is, reporting, recordkeeping or third-party disclosure 
requirements. However, section III. of this document does contain a 
general solicitation of comments in the form of a request for 
information. In accordance with the implementing regulations of the 
Paperwork Reduction Act of 1995 (PRA), specifically 5 CFR 1320.3(h)(4), 
this general solicitation is exempt from the PRA. Facts or opinions 
submitted in response to general solicitations of comments from the 
public, published in the Federal Register or other publications, 
regardless of the form or format thereof, provided that no person is 
required to supply specific information pertaining to the commenter, 
other than that necessary for self-identification, as a condition of 
the agency's full consideration, are not generally considered 
information collections and therefore not subject to the PRA. 
Consequently, there is no need for review by the Office of Management 
and Budget under the authority of the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 et seq.).

IV. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, if we proceed with a subsequent document, we may respond to the 
comments in the preamble to that document.

    Dated: June 19, 2018.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2018-13529 Filed 6-20-18; 4:15 pm]
 BILLING CODE 4120-01-P