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NDHI NAT IONAL DIALOGUE FOR Healthcare Innovation Reforming the Physician Self- Referral Law Organization Overview • Premier, Inc. is a healthcare performance improvement company that unites 3,750 hospitals and 130,000 other providers • Mission Health System, a not-for-profit independent community hospital system, is the largest healthcare system in western North Carolina and the region’s only safety net health system • Mission Health cares for nearly 900,000 people across the state’s eighteen most western counties Background Because Premier serves, and is owned by, healthcare providers, the barriers to delivering coordinated care are top priorities for Premier. Mission Health System, a Premier member, is committed to implementing value-based payments to enhance care coordination for patients and improve the system’s financial stability. However, unclear legal boundaries in fraud and abuse laws are suppressing this transition, due to the legal ramifications associated with potential violations. Mission Health’s movement toward pay for performance has been limited by the Stark Law, which prohibits provider systems from linking physician payments to the volume or value of their referrals. This law hinders value-based payment contracts because it: • Prevents health systems from compensating employed physicians differentially, based on their contributions to improving outcomes –– Instead, the Stark Law requires any incentive program to distribute payments equally to participating physicians, regardless of their level of effort, which discourages change –– While there are exception waivers for programs like ACOs, the Stark Law prevents provider systems other than ACOs from making true progress across the organization • Prohibits health systems from offering incentives to affiliated, but independent physicians, who comprise the majority of the system’s physician network –– When these physícans cannot be held accountable for outcomes because of the Stark Law, the system cannot shift to value-based care The Negative Impact of the Stark Law on Patient Care Geneticists can help expectant mothers who learn that their unborn children are carrying a fatal condition understand what to expect during the delivery. Mission Health geneticists strongly desire to have this conversation at the obstetrician’s office, in order to share this devastating information in a supportive, familiar environment. Geneticists would not charge the expectant parents or the physician’s practice for the service. However, it is possible that this service could be seen as providing “something of financial value” to the obstetrician’s practice. Because the Stark Law is a strict liability statute, which does not take program intent into account, Mission Health cannot provide this and other care-enhancing programs to patients. An Initiative of the 103 | Reforming the Physician Self-Referral Law
NDHI NAT IONAL DIALOGUE FOR Healthcare Innovation • Fails to add any important protections for the Medicare and Medicaid programs beyond those already in place under the Anti-Kickback Statute, except ownership restrictions Initiative Details • To educate lawmakers on how the Stark Law affects value-based care, Mission Health CEO Dr. Ron Paulus testified on reform of the Stark Law on July 12, 2016 • Dr. Paulus testified that instead of using the Stark Law to prevent improper physician compensation, the government can rely on the Anti-Kickback Statute • Dr. Paulus also suggested that lawmakers consider some targeted exceptions to make it easier for health systems to put physician incentives in place to encourage population health and quality of care Value Delivered • Repeal or revision of the Stark Law will enable health systems to compensate physicians appropriately based on their efforts to improve care delivery to patients • This will ultimately improve outcomes for patients, reduce costs, and lead health systems into delivering true value-based care Path Forward Mission Health will continue to advocate for the removal of impediments to healthcare reform and improvements in patient care. Reforming the Physician Self-Referral Law | 104
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Contents Foreword .................
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Foreword The U.S. healthcare indust
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Section 1 Collaborations to Enable
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