Republicans threaten to appeal Stark law
Republicans threaten to appeal Stark law
For the first time since the controversial "Stark II" law governing physician self-referral was passed six years ago, a real possibility exists that Congress will move to significantly narrow its focus or repeal it outright, experts say. Their optimism stems from a contentious hearing of the House Ways and Means Subcommittee on Health held on May 13, at which Rep. Pete Stark (D-CA) faced off against a panel of Republican house members who blasted the Stark law for its complexity and the Health Care Financing Administration (HCFA) for its almost unprecedented delay in formulating final regulations.
Stung by criticism over the delay, Kathleen Buto, deputy director of the center for health plans and providers at HCFA, told the subcommittee that her agency would finish writing final regulations within six months and publish them in the Federal Register within one year.
The fact that HCFA still hasn’t issue final regs six years after the law passed prompted Rep. Nancy Johnson (R-CT) to say the long delay indicates the law is too complex and needs to be revised. "I am appalled that we could pass a law and not tell people what it means for six years," she said.
"The Republicans are very interested in making some changes," says Sandy Teplitzky, JD, a partner at Ober, Kaler in Washington, DC. Teplitzky testified at the hearing as an advocate for changing the laws. "Clearly, the Republicans attribute the delay to the fact that the law’s very confusing and tries to draw a bright line in an area where perhaps it’s simply not possible to draw a bright line."
Indeed, several critics of the law referred ironically to Rep. Stark’s "bright line" metaphor, which he once used in defining the purpose of the self-referral legislation, saying, "What is needed is what lawyers call a bright line rule to give providers and physicians unequivocal guidance as to the types of arrangements that are permissible and the types that are prohibited. If the law is clear and the penalties are severe, we can rely on self-enforcement in the great majority of cases."
Bill Thomas (R-CA), the chair of the subcommittee, said, "We are farther from that [bright line] than in any other area of health care. Doctors and hospitals are overwhelmed with overlapping state and federal laws and red tape, including the perplexing self-referral law, that drive up the cost of health care at the very time we’re trying to make it more affordable."
Teplitzky contrasts Stark with the less complex language in the anti-kickback statute. "Having worked with that statute for many years, you tend to get it,’" he says. "There is a rationale to it, and a recognizable analysis that is applied to all health care business transactions in order to determine whether they conflict with the anti-kickback statute. The same cannot be said for the self-referral legislation."
Not surprisingly, Stark defends the law bearing his name by claiming that in some ways it’s been a "great success" and that "despite its complexity, the law is apparently working well to discourage referral-for-profit joint ventures that once plagued Medicare and Medicaid." He adds that his embarrassment over the shortcomings of the law "should be nothing compared to the shame of those who want to gut the law and return to the days of massive patient abuse, overutilization of services, and outright fraud."
Ironically, although Stark himself acknowledged that one problem with the law is the number of exemptions and carve-outs in place, he proposed four new exemptions at the hearing. "At some point, you have so many carve-outs that the law doesn’t mean anything anymore," says Teplitzky. "The law has essentially become a turf battle, with one group against another group trying to protect its part of the delivery system."
Despite Republican criticism, however, no legislation has been introduced to amend the Stark law.
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