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ARTICLE · 27 SEPTEMBER 2007

CMS Issues New Stark Rules With Some Surprising Changes

Dorsey & Whitney LLP
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The new Stark rules issued by The Centers for Medicare and Medicaid Services, together with the Stark changes proposed in July as part of the 2008 Medicare physician fee schedule rule, create a dizzying set of new rules governing health care relationships. This summary focuses on the just-released final Stark rules.

United StatesFood, Drugs, Healthcare, Life Sciences
Ross D'Emanuele
Ross D'Emanuele

The Centers for Medicare and Medicaid Services ("CMS") issued new Stark regulations on September 5, 2007. These Stark changes, called the "Phase III" regulations, are final rules, and become effective on December 4, 2007. These new Stark rules, together with the Stark changes proposed in July as part of the 2008 Medicare physician fee schedule rule, create a dizzying set of new rules governing health care relationships. This summary focuses on the just-released final Stark rules. Please see our previous Vital Signs - Special Report for a report on last month's proposed physician fee schedule rule changes.

I. Indirect Compensation

The Phase III regulations revise the definition of an indirect compensation relationship such that each physician in a physician practice "stands in the shoes" of his or her "physician organization" and is deemed to have the same compensation arrangements (with the same entities providing Stark designated health services ("DHS") and on the same terms) as

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