Policy Corner: Major Stark Law Reform on the Horizon

This week in healthcare policy - HHS proposes major Stark Law and Anti-Kickback reform, Nancy Pelosi's drug plan criticized, public charge rule blocked, & more.

Stark Law Reform and Anti-Kickback Changes for the first time in 30 years.

There’s a ton of regulation that dictates what physicians can and can’t do with patient referrals, and what they can and can’t get paid for when they’re employed.

The Stark and Anti-Kickback statutes are the most important of these regulations, and these rules were put in place to protect patients and shield them from any providers that put their own greed above the needs of patients.

Remember when we talked about the transition to value-based care earlier, though? Well, the problem is that those old laws were designed for the fee-for-service reimbursement system – meaning that physicians are paid for services rendered (1 visit for $100; 1 x-ray for $50; etc. – you get the idea).

There are still a lot of fee-for-service arrangements out there, but quite a few plans between providers and payors are transitioning to value-based arrangements.

As compared to fee-for-service, there’s a lot of variation between different value-based plans. The variation has caused a lot of confusion when it comes to Stark and Anti-Kickback laws, since the way physicians are paid changes so much.

Additionally, the old laws have probably prevented some new, innovative value-based arrangements from taking shape in the first place.

Since value-based payments have gained a lot of steam, HHS decided it was time to revamp the Stark and Anti-Kickback statutes to provide more clarify on what providers can and can’t do.

  • Read more about the potential implications of the changes here.
  • MORE: What are the other headwinds involved in the “volume to value” transition?



Public charge rule, which included Medicaid as determinant, blocked by judge.

This week, a federal judge blocked the White House’s contentious Public Charge rule, which would have used Medicaid as one of several public programs to consider the denial of green cards to immigrants based on how many ‘public resources’ that immigrants used.




New Trump rule would require migrants to have un-subsidized health insurance to enter U.S.

In a new development, the Trump administration plans to suspend migrant entry into the U.S. if that individual would financially burden the U.S. healthcare system. If upheld, that policy would take effect on November 3.

Migrants would have to prove that they have some form of valid insurance – and subsidized ACA plans don’t count. Valid forms of health insurance include employer-sponsored coverage, unsubsidized ACA plans, Medicare, and a few others.




Louisiana Abortion Case makes its way to Supreme Court.

The Supreme Court is pegged to hear an abortion case in Louisiana – June Medical Services v. Gee. The case surrounds whether it’s legal for a state to require a doctor performing an abortion to have admitting privileges at a nearby hospital.




The Latest Drug Pricing Stuff. Buttigieg’s proposal, and PhRMA claps back against Pelosi’s plan.

This week, presidential candidate Pete Buttigieg released a very ambitious drug pricing plan that would create a new public option (similar to plans we’ve seen unveiled at the state level like in Washington).

Both this new public drug plan and Medicare would have the ability to directly negotiate drug prices with pharmaceutical companies, put a tax on those pharmaceutical companies, and cap out of pocket spending for both plans in the low hundreds of dollars.

Finally, read what the PhRMA CEO had to say about Nancy Pelosi’s drug pricing proposal. A small highlight: “If H.R. 3 becomes law, it is lights out for a lot of very small biotech companies that are pre-revenue and depend on attracting capital.”

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