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AHA to CMS: Keep physician-owned hospital ban in Stark Law

Last Friday, the OIG requested public input on regulatory provisions that are barriers of coordinated care, or value-based care, including the anti-kickback statute, which prohibits self-referral for federal healthcare businesses. 

The agency has already accepted comments and feedback on ways to improve Stark Law, which addresses self-referral by a physician to a healthcare facility where the physician has financial ownership.

The American Hospital Association made its comments to CMS Administrator Seema Verma on Stark Law public on behalf of its nearly 5,000 members. While the organization supported modifications to Stark Law to promote collaboration within value-based payment models, it urged CMS not to alter the ban on physician-owned hospitals.

"We urge that compensation exceptions to the Stark Law be created or adapted to enable hospitals and physicians, working together, to coordinate care and improve patient outcomes. We urge that no changes be made to the regulations implementing the Stark Law's ownership ban. That ban is carefully developed policy that is working as Congress intended."

The AHA did not address CMS quality rating of physician-owned hospitals. In August 2016, 31 percent of the agency's 5-star hospitals were physician owned, and in 2017, 38 physician-owned hospitals earned the highest possible rating for quality. Last year, Sen. James Lankford (R.-Okla.) introduced legislation to the Senate that would repeal the ACA's moratorium on physician-owned hospitals, citing data that shows they could save Medicare $3.2 billion over a 10-year period. A companion bill was also introduced in the House.

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