VIable

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
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Reforming the Physician Self-Referral Law