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Quick, Time to Fix the Stark Law

Analysis  |  By Philip Betbeze  
   November 10, 2016

Two experts who testified at a bipartisan congressional hearing say the law is so outdated and full of exceptions that it thwarts healthcare modernization efforts and encourages perverse economic behavior.

Now that the election is mercifully behind us, healthcare CEOs are hoping that the lame-duck Congress will act to modernize the so-called Stark law.

They argue that many of Stark's prohibitions have outlived changes their usefulness or are covered by other statutes. Further, many contend the laws conflict with the Affordable Care Act's implicit requirement that healthcare entities work together to manage care.

Ron Paulus, MD, president and CEO of Mission Health in Asheville, NC, and Troy Barsky, formerly with the Department of Health and Human Services, testified last summer before a bipartisan Congressional committee that much of the Stark law is so outdated and full of exceptions that it thwarts healthcare modernization efforts and encourages perverse economic behavior.

They're hopeful the upcoming Congressional session will provide an opportunity to modify or repeal Stark, which is actually a patchwork of federal laws and exceptions intended to prevent physician self-referral.


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Paulus says the law paralyzes potential incentives between health systems and independent physicians, and prevents actions that would clearly benefit the patient.

Mission Health wanted to provide genetic counselors in private obstetricians' offices when it's discovered that a fetus will die at birth or shortly thereafter. The service would have been free to grief-stricken patients, but because the Stark laws would consider the counselors a benefit to the private obstetrician, the program was nixed, he says.

Paulus also contends that Stark prevents hospitals from rewarding independent physicians for process improvements that could improve care quality and efficiency. Mission wanted to institute an incentive program to reduce readmissions, he says, but again he had to drop that idea because of Stark.

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Philip Betbeze is the senior leadership editor at HealthLeaders.


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