Important clarification regarding compliance with certain Stark Law exceptions

With all the rulemaking taking place right now, you may have missed a small, but potentially important, clarification regarding compliance with certain Stark Law exceptions that require a signature.

In February 2018, Congress passed the Bipartisan Budget Act of 2018 (BBA), which codified in the Stark Law itself at 42 USC 1395nn(h)(1)(E) the temporary noncompliance with signature provision contained in the Stark regulations at 42 CFR 411.353(g). The existing regulatory provision permits parties to a compensation arrangement up to 90 calendar days to obtain the required signatures for an otherwise compliant arrangement. But the BBA provision that amended the Stark Law does not match up exactly with the regulation at 42 CFR 411.353(g); it does not include the limitation restricting parties to use of the temporary noncompliance provision only once every three years with respect to the same referring physician. This left open the question as to whether that difference was an oversight of Congress or intentional and, if intentional, how to reconcile the regulation that is still on the books with the amended law provision.

CMS addressed the discrepancy in the 2019 Medicare Physician Fee Schedule Proposed Rule (2019 MPFS), proposing to revise the regulations to ensure that the statute and regulation are aligned and eliminate the once-every-three-years limitation. Of note, in the 2019 MPFS Proposed Rule, CMS clarifies that the statutory exception for temporary noncompliance with signature requirements without the three-year limitation was available starting February 9, 2018, not some later date after this round of rulemaking is finalized. CMS stated:

Finally, we note that the effective date of section 50404 of the Bipartisan Budget Act was February 9, 2018. Thus, beginning February 9, 2018, parties who meet the requirements of section 1877(h)(1)(E) of the Act, including parties who otherwise would have been barred from relying on the special rule for certain arrangements involving temporary noncompliance with signature requirements at § 411.353(g)(1) because of the 3-year limitation at § 411.353(g)(2), may avail themselves of the new statutory provision at section 1877(h)(1)(E) of the Act.