AIM Coalition Urges CMS to Strengthen Medicare Self-Referral Provisions to Support Transition to Value-Based Care

Proposed Changes to Stark Law – Including Narrowing the In-Office Ancillary Services Exception – Would Save Medicare at Least $3.3 Billion Over Next Decade

Washington, D.C. – The Medicare program could save at least $3.3 billion over the next decade by narrowing a persistent loophole in the physician self-referral law (“Stark Law”) that drives questionable utilization patterns for certain health services. The cost-savings proposal is one of the many policy provisions outlined in a new comment letter in response to the Centers for Medicare and Medicaid Services’ (CMS) recent Request for Information Regarding the Physician Self-Referral Law (CMS-1720-NC) from members of the Alliance for Integrity in Medicare (AIM), a broad coalition of medical specialty, laboratory, radiation oncology and medical imaging groups committed to ending the practice of inappropriate physician self-referral.

AIM members have highlighted the need to narrow the in-office ancillary services (IOAS) exception to the Stark Law to help support value-based care. While the intention of the IOAS exception is to promote patient convenience by allowing physicians to self-refer for certain services furnished in their group practices, self-referral of these services under traditional Fee-for-Service (FFS) Medicare  does not enhance patient convenience; rather, it drives overutilization of these services.

In its present form, the IOAS exception bolsters the continuation of questionable utilization patterns for advanced diagnostic imaging, anatomic pathology, physical therapy and radiation therapy –trends that continue to drive up costs in FFS Medicare. The IOAS exception runs counter to CMS’ goal of coordinated care and incentivizes ongoing overutilization, ultimately undermining the goals of value-based care.

Narrowing the IOAS exception to exclude advanced diagnostic imaging, anatomic pathology, physical therapy and radiation therapy services will improve patient care while preserving valuable Medicare resources and the integrity of the program, as AIM members note in their comments. Importantly, the Department of Health and Human Services (HHS) has taken steps to address inappropriate self-referral in the HHS Fiscal Year 2019 Budget by proposing to create an exception to the IOAS for those participating in alternative payment models.

“Narrowing the IOAS exception will realign provider incentives to help ensure appropriate utilization,” AIM members state. “The ability of all providers to render quality, safe and clinically appropriate care to all patients will be maintained, while eliminating the lure of personal financial gain.”

About the Alliance for Integrity in Medicare Coalition
The Alliance for Integrity in Medicare (AIM) is a broad coalition of medical societies committed to ending the practice of inappropriate physician self‐referral and focused on improving patient care and preserving valuable Medicare resources. AIM partners include the American Brachytherapy Society (ABS), the American Clinical Laboratory Association (ACLA), the American Physical Therapy Association (APTA), the American Society for Clinical Pathology (ASCP), the American Society for Radiation Oncology (ASTRO), the Association for Quality Imaging (AQI), and the College of American Pathologists (CAP).

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