Stark II Analysis and Summary

Certification of Need for Home Health Services

The final rulemaking has finally settled the running controversy between the application of the Stark rules and the pre-existing home health regulations that prohibited a physician from certifying plans of care for a home health agency if the physician had a significant ownership interest in or contractual or financial relationship with the agency. HCFA has determined that the Stark II law should supersede the previous home health physician certification law. According to the preamble, this revision in the law becomes effective on February 5, 2001, earlier than the deferred one-year effective date that applies to the rest of the final rule.

As a result, phsicians who meet one of the exceptions of the Stark II law may have an ownership interest in or compensation arrangement with a home health agency. For example, a physician who meets the employment exception could receive compensation from a home health agency and still certify plans of care for that home health agency's patients. The exceptions to the previous home health physician certification law, e.g., the 5 percent limitation on ownership by physicians and the sole community provider status for home health agencies, are no longer available.

See also III. B. 5. above for the special treatment of some home care physicians under the in-office ancillary exception.

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