29524 Federal Register / Vol. 83, No. 122 / Monday, June 25, 2018 / Proposed Rules 

February 16, 1994) establishes federal 

executive policy on environmental 

justice. Its main provision directs 

federal agencies, to the greatest extent 

practicable and permitted by law, to 

make environmental justice part of their 

mission by identifying and addressing, 

as appropriate, disproportionately high 

and adverse human health or 

environmental effects of their programs, 

policies, and activities on minority 

populations and low-income 

populations in the United States. 

Because this rule authorizes pre-existing 

state rules which are at least equivalent 

to, and no less stringent than existing 

federal requirements, and impose no 

additional requirements beyond those 

imposed by state law, and there are no 

anticipated significant adverse human 

health or environmental effects, the rule 

is not subject to Executive Order 12898. 

The Congressional Review Act, 5 U.S.C. 

801 et seq., as added by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, generally provides 

that before a rule may take effect, the 

agency promulgating the rule must 

submit a rule report, which includes a 

copy of the rule to each House of the 

Congress and to the Comptroller General 

of the United States. The EPA will 

submit a report containing this 

document and other required 

information to the U.S. Senate, the U.S. 

House of Representatives, and the 

Comptroller General of the United 

States prior to publication in the 

Federal Register. A major rule cannot 

take effect until 60 days after it is 

published in the Federal Register. This 

action is not a ‘‘major rule’’ as defined 

by 5 U.S.C. 804(2). This action 

nevertheless will be effective 60 days 

after the final approval is published in 

the Federal Register. 

List of Subjects in 40 CFR Part 271 

Environmental protection, 

Administrative practice and procedure, 

Confidential business information, 

Hazardous materials transportation, 

Hazardous waste, Incorporation by 

reference, Indian—lands, Hazardous 

waste transportation, Intergovernmental 

relations, Penalties, Reporting and 

recordkeeping requirements, Water 

pollution control, Water supply. 

Authority: This action is issued under the 

authority of sections 2002(a), 3006, and 

7004(b) of the Solid Waste Disposal Act as 

amended, 42 U.S.C. 6912(a), 6926, and 

6974(b). 

Dated: June 8, 2018. 

Deborah Jordan, 

Acting Regional Administrator, Region 9. 

[FR Doc. 2018–13573 Filed 6–22–18; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 411 

[CMS–1720–NC] 

RIN 0938–AT64 

Medicare Program; Request for 

Information Regarding the Physician 

Self-Referral Law 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Request for information. 

SUMMARY: This request for information 

seeks input from the public on how to 

address any undue regulatory impact 

and burden of the physician self-referral 

law. 

DATES: Comment Date: To be assured 

consideration, comments must be 

received at one of the addresses 

provided below, no later than 5 p.m. on 

August 24, 2018. 

ADDRESSES: In commenting, refer to file 

code CMS–1720–NC. Because of staff 

and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

Comments, including mass comment 

submissions, must be submitted in one 

of the following three ways (please 

choose only one of the ways listed): 

1. Electronically. You may submit 

electronic comments on this regulation 

to http://www.regulations.gov. Follow 

the ‘‘Submit a comment’’ instructions. 

2. By regular mail. You may mail 

written comments to the following 

address ONLY: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–1720–NC, P.O. Box 8013, 

Baltimore, MD 21244–8013. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address ONLY: Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–1720–NC, 

Mail Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: Lisa 

O. Wilson, (410) 786–8852. 

SUPPLEMENTARY INFORMATION: 

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following 

website as soon as possible after they 

have been received: http://

www.regulations.gov. Follow the search 

instructions on that website to view 

public comments. 

I. Introduction 

The Department of Health and Human 

Services (HHS) is working to transform 

the healthcare system into one that pays 

for value. Care coordination is a key 

aspect of systems that deliver value. 

Removing unnecessary government 

obstacles to care coordination is a key 

priority for HHS. To help accelerate the 

transformation to a value-based system 

that includes care coordination, HHS 

has launched a Regulatory Sprint to 

Coordinated Care, led by the Deputy 

Secretary. This Regulatory Sprint is 

focused on identifying regulatory 

requirements or prohibitions that may 

act as barriers to coordinated care, 

assessing whether those regulatory 

provisions are unnecessary obstacles to 

coordinated care, and issuing guidance 

or revising regulations to address such 

obstacles and, as appropriate, 

encouraging and incentivizing 

coordinated care. 

The Centers for Medicare & Medicaid 

Services (CMS) has made facilitating 

coordinated care a top priority and 

seeks to identify ways in which its 

regulations may impose undue burdens 

on the healthcare industry and serve as 

obstacles to coordinated care and its 

efforts to deliver better value and care 

for patients. Through internal 

discussion and input from external 

stakeholders, CMS has identified some 

aspects of the physician self-referral law 

as a potential barrier to coordinated 

care. Addressing unnecessary obstacles 

to coordinated care, real or perceived, 

caused by the physician self-referral law 

is one of CMS’s goals in this Regulatory 

Sprint. To inform our efforts to assess 

and address the impact and burden of 

the physician self-referral law, 

including whether and, if so, how it 

may prevent or inhibit care 

coordination, we welcome public 

comment on the physician self-referral 

law and, in particular, comment on the 

questions presented in this Request for 

Information (RFI). 

II. Background 

When enacted in 1989, the physician 

self-referral law (section 1877 of the 

Social Security Act), also known as the 


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‘‘Stark Law,’’ addressed the concern that 

health care decision making can be 

unduly influenced by a profit motive. 

When physicians have a financial 

incentive to refer patients for health care 

services, this incentive may affect 

utilization, patient choice, and 

competition. Overutilization may occur 

when items and services are ordered 

that would not have been ordered 

absent a profit motive. A patient’s 

choice can be affected when he or she 

is steered to less convenient, lower 

quality, or more expensive providers of 

health care that are sharing profits with, 

or providing other remuneration to, the 

referring practitioner. Where referrals 

are controlled by those sharing profits or 

receiving other remuneration, the 

medical marketplace suffers since new 

competitors may have more difficulty 

generating business on superior quality, 

service, or price alone. 

By design, the physician self-referral 

law is intended to disconnect a 

physician’s health care decision making 

from his or her financial interests in 

other health care providers and 

suppliers. Specifically, the law: (1) 

Prohibits a physician from making 

referrals for certain designated health 

services (DHS) payable by Medicare to 

an entity with which he or she (or an 

immediate family member) has a 

financial relationship (ownership or 

compensation), unless an exception 

applies; and (2) prohibits the entity from 

filing claims with Medicare (or billing 

another individual, entity, or third party 

payer) for those referred services. The 

prohibitions are absolute unless the 

physician’s referral is permitted under 

an enumerated exception. The statute 

establishes a number of specific 

exceptions, and grants the Secretary the 

authority to create regulatory exceptions 

for financial relationships that do not 

pose a risk of program or patient abuse. 

For more information, please refer to the 

CMS physician self-referral website at 

https://www.cms.gov/Medicare/Fraudand-Abuse/PhysicianSelfReferral/ 

index.html?redirect=/ 

PhysicianSelfReferral/. 

CMS is aware of the effect the 

physician self-referral law may have on 

parties participating or considering 

participation in integrated delivery 

models, alternative payment models, 

and arrangements to incent 

improvements in outcomes and 

reductions in cost. The President’s 

Budget for fiscal year (FY) 2019 

included a legislative proposal to 

establish a new exception to the 

physician self-referral law for 

arrangements that arise due to 

participation in alternative payment 

models. In addition to this legislative 

proposal, CMS has engaged stakeholders 

through comment solicitations in 

several recent rulemakings. In 2017, 

through the annual payment rules, CMS 

asked for comments on improvements 

that can be made to the health care 

delivery system that reduce unnecessary 

burdens for clinicians, other providers, 

and patients and their families. In 

response, commenters shared additional 

information regarding the barriers to 

participation in health care delivery and 

payment reform efforts, both public and 

private, as well as the burdens of 

compliance with the physician selfreferral law and our regulations as they 

exist today. As a result of our review of 

these comments, and with a goal of 

reducing regulatory burden and 

dismantling barriers to value-based care 

transformation, while also protecting 

the integrity of the Medicare program, 

we are requesting additional 

information in this RFI. We are 

particularly interested in your thoughts 

on issues that include, but are not 

limited to, the structure of arrangements 

between parties that participate in 

alternative payment models or other 

novel financial arrangements, the need 

for revisions or additions to exceptions 

to the physician self-referral law, and 

terminology related to alternative 

payment models and the physician selfreferral law. We look forward to 

receiving your input on this RFI. 

III. Request for Information 

We are requesting public input on the 

following areas: 

1. Please tell us about either existing 

or potential arrangements that involve 

DHS entities and referring physicians 

that participate in alternative payment 

models or other novel financial 

arrangements, whether or not such 

models and financial arrangements are 

sponsored by CMS. Please include a 

description of the alternative payment 

model(s) and novel financial 

arrangements if not sponsored by CMS. 

We recommend that you identify 

concerns regarding the applicability of 

existing exceptions to the physician 

self-referral law and/or the ability of the 

arrangements to satisfy the requirements 

of an existing exception, as well as the 

extent to which the physician selfreferral law may be impacting 

commercial alternative payment models 

and novel financial arrangements. 

Please be specific regarding the terms of 

the arrangements with respect to the 

following: 

• The categories/types of parties (for 

example, the parties are a hospital and 

physician group with downstream 

payments to individual physicians in 

the group). 

• Which parties bear risk (and how 

and to what extent) under the 

arrangement (for example, per capita 

payments from a payor are paid to a 

hospital with downstream payments on 

a discounted fee schedule to individual 

physicians; a bundled payment from a 

payor for all hospital and physician 

services is split between a hospital and 

physicians based on a predetermined 

percentage; hospital-sponsored 

gainsharing program where 

participating physicians share in cost 

savings; physician incentive payments 

are available for achieving 

predetermined metrics; etc.). 

• The scope of the arrangement (for 

example, non-Medicare beneficiaries 

only, Medicare beneficiaries only, or all 

patients regardless of payor). 

• The timeframe of the arrangement 

(for example, ongoing or for a duration 

that aligns with a payor-specific 

initiative). 

• Items and services provided under 

the arrangement and by whom (for 

example, infrastructure, such as 

electronic health records technology; 

physician services; care coordination 

services; etc.). 

• How the arrangement furthers the 

purpose of the alternative payment 

model or novel financial arrangement. 

• Whether and, if so, how the 

arrangement mitigates the financial 

incentives for inappropriate selfreferrals, and/or overutilization of items 

and services, and patient choice. 

2. What, if any, additional exceptions 

to the physician self-referral law are 

necessary to protect financial 

arrangements between DHS entities and 

referring physicians who participate in 

the same alternative payment model? 

Specifically— 

• What additional exceptions are 

necessary to protect accountable care 

organization models? 

• What additional exceptions are 

necessary to protect bundled payment 

models? 

• What additional exceptions are 

necessary to protect two-sided risk 

models in a FFS environment? 

• What additional exceptions are 

necessary to protect other payment 

models (please explain the nature and 

design of such models)? 

• How (if at all) should a new 

exception (or exceptions) protect 

individual DHS referrals (see 42 CFR 

411.355), ownership or investment 

interests (see 42 CFR 411.356), or 

compensation arrangements (see 42 CFR 

411.357)? 

3. What, if any, additional exceptions 

to the physician self-referral law are 

necessary to protect financial 

arrangements that involve integrating 


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and coordinating care outside of an 

alternative payment model? 

Specifically, what types of financial 

arrangements and/or remuneration 

related to care integration and 

coordination should be protected and 

why? How (if at all) should a new 

exception (or exceptions) protect 

individual DHS referrals (see 42 CFR 

411.355), ownership or investment 

interests (see 42 CFR 411.356), or 

compensation arrangements (see 42 CFR 

411.357)? 

4. Please share your thoughts on the 

utility of the current exception at 42 

CFR 411.357(n) for risk-sharing 

arrangements. 

5. Please share your thoughts on the 

utility of the special rule for 

compensation under a physician 

incentive plan within the exception at 

42 CFR 411.357(d) for personal service 

arrangements. 

6. Please share your thoughts on 

possible approaches to address the 

application of the physician self-referral 

law to financial arrangements among 

participants in alternative payment 

models and other novel financial 

arrangements. Consider the following: 

• Would a single exception provide 

sufficient protection for all types of 

financial arrangements? 

• Would a multifaceted approach that 

amends existing exceptions and/or 

establishes new exceptions be 

preferable? 

• Would such a multifaceted 

approach sufficiently allow parties to 

identify and satisfy the requirements of 

one (or more) applicable exceptions in 

order to protect individual DHS 

referrals, ownership or investment 

interests, and/or compensation 

arrangements? 

7. In the context of health care 

delivery, payment reform, and the 

physician self-referral law, please share 

your thoughts on definitions for critical 

terminology such as— 

• Alternative payment model 

• Care coordination 

• Clinical integration 

• Financial integration 

• Risk 

• Risk-sharing 

• Physician incentive program 

• Gainsharing 

• Health plan 

• Health system 

• Integrated delivery system 

• Enrollee 

8. Please identify and suggest 

definitions for other terminology 

relevant to the comments requested in 

this RFI. 

9. Please share your thoughts on 

possible approaches to defining 

‘‘commercial reasonableness’’ in the 

context of the exceptions to the 

physician self-referral law. 

10. Please share your thoughts on 

possible approaches to modifying the 

definition of ‘‘fair market value’’ 

consistent with the statute and in the 

context of the exceptions to the 

physician self-referral law. 

11. Please share your thoughts on 

when, in the context of the physician 

self-referral law, compensation should 

be considered to ‘‘take into account the 

volume or value of referrals’’ by a 

physician or ‘‘take into account other 

business generated’’ between parties to 

an arrangement. Please share with us, by 

way of example or otherwise, 

compensation formulas that do not take 

into account the volume or value of 

referrals by a physician or other 

business generated between parties. 

12. Please share your thoughts on 

when, in the context of alternative 

payment models and other novel 

financial arrangements, compensation 

should be considered to ‘‘take into 

account the volume or value of 

referrals’’ by a physician or ‘‘take into 

account other business generated’’ 

between parties to an arrangement. 

Please share with us, by way of example 

or otherwise, compensation formulas 

that do not take into account the volume 

or value of referrals by a physician or 

other business generated between 

parties. 

13. Please share your thoughts 

regarding whether and, if so, what 

barriers exist to qualifying as a ‘‘group 

practice’’ under the regulations at 42 

CFR 411.352. 

14. Please share your thoughts on the 

application and utility of the current 

exception at 42 CFR 411.357(g) for 

remuneration unrelated to DHS. 

Specifically, how could CMS interpret 

this exception to cover a broader array 

of arrangements? 

15. Please identify any provisions, 

definitions, and/or exceptions in the 

regulations at 42 CFR 411.351 through 

411.357 for which additional 

clarification would be useful. 

16. Please share your thoughts on the 

role of transparency in the context of the 

physician self-referral law. For example, 

if provided by the referring physician to 

a beneficiary, would transparency about 

physician’s financial relationships, 

price transparency, or the availability of 

other data necessary for informed 

consumer purchasing (such as data 

about quality of services provided) 

reduce or eliminate the harms to the 

Medicare program and its beneficiaries 

that the physician self-referral law is 

intended to address? 

17. Please share your thoughts on 

whether and how CMS could design a 

model to test whether transparency 

safeguards other than those currently 

contained in the physician self-referral 

law could effectively address the impact 

of financial self-interest on physician 

medical decision-making. 

18. Please share your thoughts on the 

compliance costs for regulated entities. 

19. Please identify any recent studies 

assessing the positive or negative effects 

of the physician self-referral law on the 

healthcare industry. To the extent 

publicly available, please provide a 

copy of the study(ies). 

20. Please share your thoughts 

regarding whether CMS should measure 

the effectiveness of the physician selfreferral law in preventing unnecessary 

utilization and other forms of program 

abuse relative to the cost burden on the 

regulated industry and, if so, how CMS 

could estimate this. 

Respondents are encouraged to 

provide complete but concise and 

organized responses, including any 

relevant data and specific examples. 

However, respondents are not required 

to address every issue or respond to 

every question discussed in this RFI to 

have their responses considered. In 

accordance with the implementing 

regulations of the Paperwork Reduction 

Act at 5 CFR 1320.3(h)(4), all responses 

will be considered provided they 

contain information CMS can use to 

identify and contact the commenter, if 

needed. 

Please note, this is a request for 

information only. As previously stated, 

respondents are encouraged to provide 

complete but concise responses. This 

RFI is issued solely for information and 

planning purposes; it does not 

constitute a Request for Proposal (RFP), 

application, proposal abstract, or 

quotation. This RFI does not commit the 

U.S. Government to contract for any 

supplies or services or make a grant 

award. Further, CMS is not seeking 

proposals through this RFI and will not 

accept unsolicited proposals. 

Respondents are advised that the U.S. 

Government will not pay for any 

information or administrative costs 

incurred in response to this RFI; all 

costs associated with responding to this 

RFI will be solely at the interested 

party’s expense. Not responding to this 

RFI does not preclude participation in 

any future procurement, if conducted. It 

is the responsibility of the potential 

responders to monitor this RFI 

announcement for additional 

information pertaining to this request. 

Please note that CMS will not respond 

to questions about the policy issues 

raised in this RFI. CMS may or may not 


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choose to contact individual responders. 

Such communications would only serve 

to further clarify written responses. 

Contractor support personnel may be 

used to review RFI responses. 

Responses to this RFI are not offers 

and cannot be accepted by the U.S. 

Government to form a binding contract 

or issue a grant. Information obtained as 

a result of this RFI may be used by the 

U.S. Government for program planning 

on a non-attribution basis. Respondents 

should not include any information that 

might be considered proprietary or 

confidential. This RFI should not be 

construed as a commitment or 

authorization to incur costs for which 

reimbursement would be required or 

sought. All submissions become U.S. 

Government property and will not be 

returned. CMS may publicly post the 

comments received, or a summary 

thereof. 

IV. Collection of Information 

Requirements 

This document does not impose 

information collection requirements, 

that is, reporting, recordkeeping or 

third-party disclosure requirements. 

However, section III. of this document 

does contain a general solicitation of 

comments in the form of a request for 

information. In accordance with the 

implementing regulations of the 

Paperwork Reduction Act of 1995 

(PRA), specifically 5 CFR 1320.3(h)(4), 

this general solicitation is exempt from 

the PRA. Facts or opinions submitted in 

response to general solicitations of 

comments from the public, published in 

the Federal Register or other 

publications, regardless of the form or 

format thereof, provided that no person 

is required to supply specific 

information pertaining to the 

commenter, other than that necessary 

for self-identification, as a condition of 

the agency’s full consideration, are not 

generally considered information 

collections and therefore not subject to 

the PRA. Consequently, there is no need 

for review by the Office of Management 

and Budget under the authority of the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501 et seq.). 

IV. Response to Comments 

Because of the large number of public 

comments we normally receive on 

Federal Register documents, we are not 

able to acknowledge or respond to them 

individually. We will consider all 

comments we receive by the date and 

time specified in the DATES section of 

this preamble, and, if we proceed with 

a subsequent document, we may 

respond to the comments in the 

preamble to that document. 

Dated: June 19, 2018. 

Seema Verma, 

Administrator, Centers for Medicare & 

Medicaid Services. 

[FR Doc. 2018–13529 Filed 6–20–18; 4:15 pm] 

BILLING CODE 4120–01–P 


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