CMS Releases Stark II, Phase III Rules

On September 5, 2007, the long-awaited Stark II, Phase III final rules were published by the Centers for Medicare & Medicaid Services (CMS). The Phase III final rules impact countless aspects of the existing Stark regulations. On September 28, 2007 Foley hosted “CMS Releases Stark II, Phase III Rules” Web conference. Foley partner Charles B. Oppenheim covered some of the key changes such as:

• Physician recruitment rules
  
• Scaled back “indirect compensation arrangement” concept
  
• The “standing in the shoes” treatment of physicians, which now requires arrangements with physician organizations to meet a direct Stark exception
  
• The elimination of the “safe harbor” for determining hourly fair market value compensation for physicians
  
• The added six-month holdover concept to the personal services arrangement exception 
  
• Ability of parties to cure non-monetary compensation in excess of the annual limit, in certain cases, if the physician repays the excess compensation to the entity