CMS Proposes Changes to Stark Law Advisory Opinion Process

As part of its proposed rule pertaining to CY 2020 changes to the physician fee schedule published in the Federal Register on August 14, 2019, the Centers for Medicare and Medicaid Services (CMS) also proposes significant changes to the advisory opinion regulations applicable to the Physician Self-Referral Law, also known as the Stark Law (“Stark Law”). The move comes in response to public comments made as a result of a 2018 Request for Information (RFI) regarding CMS’s call for recommendations to address any undue impact and burden presented by the Stark Law. The Stark Law advisory opinion regulations generally are patterned after the advisory opinion regulations applicable to the Department of Health and Human Services (HHS), Office of Inspector General (OIG) for matters related to the Federal Anti-Kickback Statute (AKS). Commenters in response to the RFI advocated for changes based on the complexity and strict liability nature of the Stark Law, as well as the need for certainty before arrangements are initiated and payment claims submitted. Moreover, in the proposed rule, CMS admits that the existing advisory opinion process has not been heavily utilized by stakeholders, with only 30 advisory opinions having been issued during the past 20 years. Accordingly, CMS proposes to make the following changes to the Stark Law advisory opinion process:

  • Requests That Will Not Be Accepted – 42 C.F.R. § 411.370(e) – Under the existing regulation, CMS will not accept an advisory opinion request (or issue an advisory opinion) if (1) the request is not related to a named individual or entity; (2) CMS is aware that the same, or substantially the same, course of action is under investigation, or is or has been the subject of a proceeding involving HHS or another governmental agency; or (3) CMS believes that it cannot make an informed opinion or could only make an informed opinion after extensive investigation, clinical study, testing, or collateral inquiry.
    • CMS proposes to add an additional basis for rejecting an advisory opinion request where the requestor does not describe the arrangement at issue with a level of detail sufficient for the agency to issue an opinion, and the requestor does not respond on a timely basis to CMS requests for additional information.
    • With respect to subparagraph (2), CMS proposes to provide itself with more discretion to determine, after consultation with the OIG or U.S. Department of Justice, whether acceptance of the advisory opinion request is appropriate. CMS reasons that doing so will provide it with more flexibility than it presently has under the existing language of subparagraph (2).
  • Timeline for Issuing an Advisory Opinion – 42 C.F.R. § 411.380 – CMS proposes to decrease the timeline for issuing advisory opinions from 90 days to 60 days. The 60 days would begin to run upon CMS’s formal acceptance of the advisory opinion request and would be tolled during any time periods during which the request is being revised or additional information is being compiled and presented by the requestor. CMS states that it also is considering whether to afford requestors the option of requesting expedited review to give requestors more certainty and encourage innovative care delivery arrangements.
  • Certification Signature Requirement – 42 C.F.R. § 411.372(b)(8) – Presently, the regulation identifies with specificity who must certify an advisory opinion request depending on the organizational structure of the requestor. CMS proposes to require only that the certification be signed by an officer authorized to act on behalf of the requestor. Further, CMS states that it is considering whether to eliminate the certification altogether because 18 U.S.C. § 1001 already prohibits material false statements in matters within the jurisdiction of the executive, legislative, or judicial branch of the Federal government. CMS asks for stakeholder input on the appropriateness of eliminating the certification requirement.
  • Fees – 42 C.F.R. § 411.375 – CMS proposes to eliminate the current fee structure whereby requestors pay an initial fee of $250 plus the additional cost (if any) in excess of $250 for CMS to prepare the opinion, subject to the designation by the requestor of a triggering cap. Instead, CMS would charge $220 per hour ($440 per hour for expedited requests). Additionally, CMS is seeking stakeholder input regarding whether there should be a cap on the amount of fees charged for an advisory opinion.
  • Reliance on an Advisory Opinion – 42 C.F.R. § 411.387 – Presently, advisory opinions may be legally relied upon only by the requestor(s). CMS proposes to liberalize the provisions relating to reliance on an advisory opinion by revising Section 411.387 as follows:
    • § 411.387(a) – CMS proposes that a favorable advisory opinion would preclude the imposition of sanctions with respect to the requestor(s) and any individuals or entities that are parties to the specific arrangement that is the subject of the advisory opinion.
    • § 411.387(b) – CMS proposes that a favorable advisory opinion would preclude the imposition of sanctions against individuals or entities that are parties to an arrangement that CMS determines is “indistinguishable in all its material aspects” from an arrangement that was the subject of such favorable advisory opinion. CMS cautions, however, that all facts relied on and influencing a legal conclusion in the opinion are material, and that deviation from that set of facts would defeat reliance by the individuals or entities.
    • § 411.387(c) – Individuals and entities may reasonably rely on an advisory opinion as “non-binding guidance that illustrates the application of the self-referral law and regulations to specific facts and circumstances described in the advisory opinion.” As its rationale for the change, CMS notes that stakeholders already look to such opinion letters to inform their decision making, and accordingly, the change merely acknowledges that such reliance is permissible and reasonable.
  • Rescission – 42 C.F.R. § 411.382 – Although the proposed rule makes no changes to this section, which provides that CMS reserves the right to reconsider the questions involved in an opinion and, if it determines that it is in the public interest, to rescind or revoke the opinion, CMS is seeking input from stakeholders regarding whether it should limit its right to rescind or revoke only where there is a material regulatory change that impacts the conclusions reached, or when a party has received a negative advisory opinion and wishes to have the agency reconsider the request in light of new facts or law.

Comments on the proposed rule must be received no later than 5:00 p.m. on September 27, 2019.