CMS is revisiting the Stark “stand in the shoes” provision as a component of its 2009 Hospital Inpatient Prospective Payment System (IPPS) proposed rule.
This provision, which was included in the Phase III final rule, is aimed at determining whether a direct or indirect compensation arrangement exists between a physician and an entity to which the physician refers Medicare patients for DHS. To do so, the referring physician would stand in the shoes of:
- 1. Another physician who employs the referring physician
- 2. His or her wholly-owned professional corporation
- 3. A physician practice (that is, a medical practice) that employs or contracts with the referring physician
- 4. A group practice of which the referring physician is a member or independent contractor
This concept meant, for practical purposes, that the relationship between the Stark provider and the physician would also need to meet a Stark Act exception even though the physician didn’t have a direct relationship with the provider. This was viewed as needed due to the concept that providers would pay physician-owned entities in manners that otherwise don’t comply with Stark but avoid the Stark Act prohibitions by utilizing intermediate entities.
In the IPPS proposed rule, CMS presented two proposals for how it may define indirect compensation arrangement.
- Under the first proposal, CMS would revise the provision to provide that a physician would be deemed not to stand in the shoes of his or physician organization if the compensation arrangement between the physician organization and the physician satisfies the requirements of an existing exception, such as for bona fide employment relationships, for personal service arrangements or for fair market value compensation. An additional exception would protect an arrangement between a physician organization and a component of an academic medical that satisfy the academic medical center’s obligations under the Medicare graduate medical education rules.
- Under the second proposal, the provision would go unchanged but would promulgate a new exception to include nonabusive arrangements that warrant protection not available under existing exceptions, such as certain “mission support” payments, subject to conditions necessary to protect against program and patient abuse.
The effective date for the provision was December 2007, but CMS delayed the date until December 4, 2008 in a final rule issued in mid-November 2007.
The complete stand-in-the-shoes proposals can be found beginning on p. 577 of the IPPS proposed rule. You can find it by visiting www.cms.hhs.gov/AcuteInpatientPPS/downloads/CMS-1390-P.pdf.
