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Congress Being Urged by Some in “Big Medicine” and CMS, to Downgrade or Eliminate Stark Laws/Rules That Preclude Self-Referral

Earlier this year, Medicare implemented a new policy on Comprehensive Care of Joint Replacement.  While positioned as a pilot test, all hospitals were forced to be involved.  Under this new program, hospitals are given financial incentives to reduce the total cost for hip and knee replacements.  If hospitals succeed in driving down the total costs, the hospitals keep a portion of the savings. If the hospitals fail to drive down the total costs, the hospitals will have to pay a portion of the tab.  If you are a Medicare patient, do you think this means you will receive the best quality of care or the cheapest?  If you said “cheapest”, keep reading to find out how Stark Rules could protect you from these “risk-sharing” deals.

The Stark Rules, also known as the Stark Laws, were created to help control conflicts of interest in medical care.  For example, they limit certain aspects of physician ownership of facilities to which physicians refer patients, including those facilities that provide blood tests and X-rays. In addition, they restrict other actions which could compromise the fundamental principle that patients can always look to their health care providers, first and foremost, to advocate for what is best for them as patients – not what makes them the most money.

As CMS/Medicare and other payers try to move aggressively toward “valued-based purchasing” and provider risk-sharing, CMS, private payers, and hospitals—all of whom stand to profit if others, namely providers, can be enticed to shoulder some of the risk and uncertainty that goes along with risk sharing—have found the Stark rules inconvenient and have beseeched their friends in Congress to do away with or, at least, substantially reduce the ‘teeth’ in the Stark Rules’ prohibitions on provider conflict of interest.  It is a game of big medicine vs. the little guys—patients and providers.  What we talk about as risk sharing today is very similar to what we used to call capitation, managed care, or HMOs.  If you think those things made things better for patients, then sure, do away with the Stark Rules and allow the system to create deals that operate to incentivize reductions in care to patients.

There is one aspect of how CMS has interpreted the Stark Rules that has proven particularly controversial, that being the in-office ancillary services (IOAS) exception, which among a number of other instances where it has permitted a measure of physician self-referral that the Stark Rules would NOT permit, this IOAS exemption granted by CMS has been used by some physicians to themselves deliver and bill to patients for prosthetics and/or orthotic devices supplies within the physician’s office or a related physically adjacent facility.  While AOPA and others oppose these broad interpretations of the in-office ancillary services exemption, it is important to recognize that eliminating the Stark Rules would open the door to even wider, essentially unlimited self-referral by hospitals, rehab facilities, as well as physician offices.  If you oppose the exemption CMS has granted in the in office ancillary services exemption, you very likely favor the underlying broad prohibition on self-referral (by physicians and other providers) that is embodied in the Stark Rules.  The bottom line, after all, is assuring the highest possible level and quality of patient care for prosthetic and orthotics patients.

However, if the Stark Rules are eliminated, Payers could set mechanisms to award all the business to the lowest bidder…again, patient beware.  Keep your eyes open, and let your voices be heard—with Congress, with your state legislators and others—it’s important!

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