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Is Stark Too Restrictive?

Elyas Bakhtiari, for HealthLeaders Media, October 1, 2009

The reasoning behind the original Stark law—to prohibit physicians from turning patients into profit centers by referring them to entities in which they have a financial interest—is fairly sound. Medicine is fundamentally different from most business ventures in that patient health and lives are at stake. The Hippocratic Oath by itself isn't enough to keep in check the potentially wayward invisible hand of profit-driven medicine.

But many physicians are small business owners and need to keep down costs and partner with other providers to make a living and provide quality care to their patients. Yet complying with Stark has become a game of cat and mouse, in which providers have to parse limited exceptions to the restrictions and continually revamp contracts in order to avoid becoming a criminal.

Stark law has been developed in three major phases, but there have been many more tweaks and changes over the years. Stark rules have popped up in the Inpatient Prospective Payment System, the Medicare Physician Fee Schedule, and in separate releases in the Federal Register. How is a physician supposed to follow along? The only real winners are the healthcare lawyers who interpret the regulations for a living.

I'm not suggesting we do away with Stark completely—self-referral deserves some attention. But as interest in hospital-physician partnerships has increased, it has become more difficult for them to work together.

Some simplification would help physicians and hospitals a lot.


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Elyas Bakhtiari is a freelance editor for HealthLeaders Media.

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