Stark Phase III Rules Loosen Recruitment and Retention Requirements


On September 5, 2007, the Centers for Medicare & Medicaid Services (CMS) published long-awaited final “Phase III” rules under the Stark Law (Physician Self-Referral Law, Sec. 1877 of the Social Security Act, 42 U.S.C. § 1395nn). While the Phase III rules generally are designed to close perceived “loopholes” in Stark exceptions, there are several instances where CMS’ response relaxes restrictions as a result of the health industry’s needs for flexibility. In particular, the rules for recruitment and retention of physicians have changed under Stark Phase III to make it somewhat easier to meet community need for physician services in the face of the growing national shortage of physicians.

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