Stark Law Criticized and Questioned by Congress
Question: Why is the Senate Finance Committee looking to change the Stark Law?
Answer: The Stark Law prohibits physicians from referring patients to hospitals, labs and other doctors that the physicians have financial relationships with, unless they meet certain circumstances or “safe harbors.” Critics of the law, however, point to the fact that no intent of wrongdoing is required to prove liability, and offenses carry potentially crippling civil monetary penalties. This is particularly the case now that the government has shifted its strategy and is pursuing Stark violations under the False Claims Act, which allows for treble damages. According to a recent report from the Senate Finance Committee (“SFC”), “despite CMS’ efforts to provide clear rules and interpretations to address the strict liability regime, the Stark Law’s breadth, complexity and impenetrability have created a minefield for the healthcare industry.” In a recent case against Tuomey Healthcare System in Sumter, South Carolina, Appellate Judge Albert Diaz upheld a $237 million ruling against the hospital but cautioned that the Stark Law is “a booby trap rigged with strict liability and potentially ruinous exposure—especially when coupled with the False Claims Act.” The SFC’s report called the Stark Law “increasingly unnecessary” and a “significant impediment” to the value-based payment models that are replacing traditional, fee-for-service models. Under the new payment model, the type of overuse of services the Stark Law was meant to prevent has been largely eliminated. The report commented on potential new waivers or exceptions to Stark, expansion of existing waivers or exceptions, a broadening of the CMS’ regulatory authority, and repealing parts of Stark or the entire law. Some did praise the Stark Law’s positive impact on restricting physician ownership and investment in providers of ancillary services, as well as the ability to self-disclose violations and the CMS’s compromise on repayment amounts. Although changes are looming for the Stark Law, how much it will change remains to be seen.
Weekly Charting Tip:

The length of your chart note is not as important as the content of your chart note. Copy and paste notes will hurt you in an insurance audit and in malpractice actions.

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