During the past few years, hospital providers have been quite concerned about whether the CME they provide free to physicians violates the Stark law. At the Hospitals and Health Systems Provider Section Meeting, held during the Alliance for CME 2007 annual conference, Alejandro Aparicio, MD, FACP, director, Division of Continuing Physician Professional Development with the American Medical Association, Chicago, outlined progress that has been made so far.

The Stark law prohibits physicians from making referrals for health services payable by Medicare or Medicaid to an organization with which the physician has a financial relationship. The second phase of the law, known as Stark II and implemented in 2004, contains provisions that have been interpreted by some hospital lawyers as prohibiting their organizations from providing CME to their doctors because CME has value and could be construed as remuneration to the physician. This would mean that CME is not exempt from the Stark II regulations, which limit these types of physician compensation to $25 or less per occurrence, or a total of $300 per year.

The AMA took issue with CME falling under the Stark II rules, and wrote a letter to the Centers for Medicare and Medicaid Services recommending that CMS develop an explicit exemption “that permits physician compensation without financial limit in the form of continuing medical education that is offered for the purpose of ensuring quality patient care.” The letter also contains a recommendation that the AMA monitor the impact of the Stark II regs on healthcare organizations' ability to provide CME to their staffs.

In a letter the AMA received in March of last year, Mark McClellan, administrator, Centers for Medicare and Medicaid Services, said, “After careful review, we do not think that a broad exception is consistent with our statutory mandate to create by regulation only those exceptions that pose no risk of program or patient abuse. In our view, CME provided at no or reduced cost — particularly CME off-site from the hospital — may pose a risk of program abuse.” The good news, however, is that CMS did agree that traditional on-site hospital CME programs, such as grand rounds and tumor boards, don't constitute remuneration to physicians and so should not fall under Stark II rules, Aparicio said.

The rule that had been published by CMS in 2004 was an interim final rule. CMS is preparing a final rule, which is expected at the end of March, 2007. Stay tuned.