In addition to clarifying the “volume or value” standard, the 2020 rulemaking revisits two other key requirements found in many Stark Law exceptions: (i) the requirement that the compensation at issue be consistent with “fair market value” and (ii) the requirement that the arrangement at issue be “commercially reasonable.” In addition to exploring CMS’s reconsideration of these two standards, we discussed how the definition of, and exception for, “indirect compensation arrangements” were modified under the new rule. 

Presentation materials

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White paper 

In December 2020, the Centers for Medicare & Medicaid Services (CMS) finalized its long-awaited changes to the agency’s regulations governing the federal physician self-referral law, commonly known as the Stark Law (Final Rule). The Final Rule represents the most significant Stark Law rulemaking in more than a decade. The Health Care Group at Dentons US presented a series of seven webinars, each with a companion white paper, addressing the principal components of the Final Rule. This is the fourth such white paper.

Our last white paper covered the Final Rule’s impact on the first of the Stark Law’s three key substantive standards, the so called “volume or value” standard (Volume/Value Standard). That Standard generally focuses on whether the compensation provided for under the arrangement at issue takes into account the volume or value of the physician’s referrals to, or other business generated for, an entity that furnishes designated health services (DHS Entity).

This white paper covers the Final Rule’s impact on the second and third key substantive standards: specifically, whether the compensation at issue is consistent with “fair market value” (FMV Standard), and whether the arrangement is “commercially reasonable” (Commercial Reasonableness Standard). This white paper also addresses the significant changes the Final Rule made to the definition of an “indirect compensation arrangement” (ICA), the most complicated of the Stark Law’s four categories of financial relationships.

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