CMS Publishes Proposed Amendments to Stark Law Advisory Opinion Regulations


On July 29, 2019, the Centers for Medicare & Medicaid Services (CMS) published the CY 2020 Medicare Physician Fee Schedule Proposed Rule, which included substantial changes to the physician self-referral law (Stark Law) advisory opinion (AO) regulations. CMS noted that the proposed amendments address comments received in response to the agency’s Request for Information Regarding the Stark Law published June 2018 in connection with the Department of Health and Human Services’ (HHS’) “Regulatory Sprint to Coordinated Care.” The proposed amendments clarify matters that could qualify for AOs, expand the scope of reliance on AOs, establish shorter timeframes for the issuance of AOs, address certification requirements and establish an hourly fee.

In Depth


Section 1877(g)(6) of the Social Security Act (the “Act”) (42 U.S.C. 1395(g)(6)) requires the Secretary of HHS to issue written AOs advising whether a referral relating to designated health services (other than clinical laboratory services) is prohibited under the Act. In 1998, implementing and interpreting regulations were issued and codified at 42 C.F.R. §§ 411.370–389, which largely adopted the HHS Office of Inspector General’s (OIG’s) approach to issuing AOs for matters related to the federal anti-kickback statute. CMS has only published 30 AOs since 1998, and 15 of the 30 pertain to the 18-month moratorium on physician self-referrals to specialty hospitals.

Proposed Revisions

Matters Subject to Advisory Opinions

Under the current regulations, CMS accepts requests for AOs that involve existing arrangements or one the requestor plans to enter. CMS is proposing to clarify that a request for an AO must “relate to” (rather than “involve”) an existing arrangement or one the requestor, in good faith, specifically plans to enter. CMS is not proposing to expand the AO process to include hypothetical fact patterns or general questions of interpretation at this time but seeks comments on whether it should do so in the future.

CMS currently does not accept an AO request or issue an AO opinion if (1) the request is not related to a named individual or entity; (2) CMS is aware that the same or substantially the same course of action is under investigation or has been the subject of a proceeding involving HHS or another governmental agency; or (3) CMS believes it cannot make an informed opinion or could only make an informed opinion after extensive investigation, clinical study, testing or collateral inquiry. CMS is proposing that it will also reject an AO request or not issue an AO if the request does not describe the arrangement with a sufficient level of detail and the requestor does not timely respond to requests for additional information regarding the arrangement.

The amendments also purport to allow CMS more discretion to determine, in consultation with OIG and the Department of Justice (DOJ), whether acceptance of an AO request or issuance of an AO is appropriate. Specifically, CMS will reject an AO request or not issue an AO opinion if, after consultation with OIG and DOJ, it determines that the course of action described in the request is substantially similar to conduct that is under investigation or is the subject of a proceeding involving HHS or other law enforcement agencies, and issuing an AO would interfere with the investigation or proceeding. CMS intends to maintain a restriction on accepting requests if CMS is aware that the specific course of action (involving the same specific parties) is under investigation or is or has been the subject of a proceeding involving HHS or another government agency.

Lastly, CMS indicates that it may opine on whether an arrangement satisfies a specific requirement of an exception to the Stark Law (such as whether a compensation arrangement is “commercially reasonable”).


CMS has historically precluded legal reliance on an AO by non-requestor third parties. CMS is proposing that a favorable AO would preclude the imposition of sanctions under § 1877(g) of the Act against any party(ies) requesting an AO and any individuals or entities that are parties to the specific arrangement (but are not the requesting parties) for which the AO is requested. Further, CMS is proposing that it will not pursue sanctions under § 1877(g) of the Act against any individuals or entities that are parties to an arrangement that CMS determines is indistinguishable in all material aspects from an arrangement that was the subject of an AO. Lastly, CMS is proposing to recognize that individuals and entities may reasonably rely on AOs as non-binding guidance that illustrates the application of the Stark Law to specific facts and circumstances.

Timeline for Issuance

CMS proposes to revise the timeframe for issuing an AO from 90 to 60 days. The 60-day period commences on the date CMS formally accepts the request but is tolled if the request is revised or the requestor provides additional information.  CMS is also considering an option for expedited review within a 30-day timeframe.

Certification Requirement

CMS currently requires a certification by the requestor as to the truthfulness of its submissions. The agency is considering eliminating the requirement on the basis that the prohibition on making material false statements under 18 U.S.C. § 1001 provides sufficient protection. CMS seeks comments on whether the existing certification requirement creates undue burden for requestors and is necessary.


Under the current regulations, CMS charges a $250 initial fee as well as additional costs incurred that exceed the fee to respond to an AO request. CMS is considering eliminating the initial $250 fee and charging $220 an hour with a potential cap to process an AO request. CMS is also considering charging $440 an hour to process an expedited request if the agency establishes an expedited pathway.


The amendments as drafted could have a significant impact on how providers use the AO process to comply with the Stark Law. By proposing to expand the matters subject to AOs and reduce the timeline for AO issuance, the proposed AO process could make CMS a more nimble arbiter and help facilitate increased sub-regulatory guidance on key Stark Law concepts that providers can more readily rely on. The question is whether CMS’s proposed structure will actually have the capacity to deliver timely and useful guidance to the provider community. Even under the existing 90-day regulatory timeline, the process for requesting an AO has historically taken significantly longer and providers have been left with uncertainty over whether existing or proposed arrangements may violate the Stark Law. Providers should consider how these modifications could affect their ability to obtain actionable and timely Stark Law guidance and security when entering into arrangements with referring physicians. CMS is accepting public comments on the proposed rule until September 27, 2019.