Stark Law
Encyclopedia
Stark law, actually three separate provisions, governs physician
self-referral for Medicare
and Medicaid
patients. The law is named for United States Congress
man Pete Stark
, who sponsored the initial bill.
is the practice of a physician referring a patient to a medical facility in which he/she has a financial interest, be it ownership, investment, or a structured compensation arrangement. Critics of the practice allege an inherent conflict of interest
, given the physician's position to benefit from the referral. They suggest that such arrangements may encourage overutilization
of services, in turn driving up health care costs. In addition, they believe that it would create a captive referral system, which limits competition by other providers. (see physician self-referral
)
Others respond to these concerns by stating that while problems exist, they are not widespread. Further, these observers contend that, in many cases, physician investors are responding to a demonstrated need which would otherwise not be met, particularly in a medically underserved area.
Amendments of 1994.
Passage of Stark II raised a series of concerns on the part of many provider groups. While Stark I and II were intended to remove potential conflicts of interest from physician decision making, a number of persons have argued that the legislation, particularly parts of Stark II, represents an unwarranted intrusion into the practice of medicine. They have stated that the legislation, particularly the provisions relating to compensation arrangements, is too complex and may, in fact, impede physicians' ability to participate in managed care networks.
On November 20, 1995, Congress gave final approval to the conference report on the Balanced Budget Act (BBA) of 1995. President
Clinton
vetoed the measure on December 6, 1995. BBA included several amendments to the physician self-referral provisions. The two major changes were the repeal of the prohibitions based on compensation arrangements and the reduction in the list of services subject to the ban.
The Federal Register announced that publication of Stark III has been extended until March 26, 2008, and Phase II will remain in effect through that date.
The Phase III final rule was published on September 5, 2007, at 72 FR 51012, and became effective December 4, 2007.
The Stark Law is related to, but not the same as, the federal anti-kickback law.
Lawyers and laypersons can find the Stark Law which is §1877 of the Social Security Act. Additionally, the regulations are at [42 C.F.R. §411.350 through §411.389].
Physician
A physician is a health care provider who practices the profession of medicine, which is concerned with promoting, maintaining or restoring human health through the study, diagnosis, and treatment of disease, injury and other physical and mental impairments...
self-referral for Medicare
Medicare (United States)
Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over; to those who are under 65 and are permanently physically disabled or who have a congenital physical disability; or to those who meet other...
and Medicaid
Medicaid
Medicaid is the United States health program for certain people and families with low incomes and resources. It is a means-tested program that is jointly funded by the state and federal governments, and is managed by the states. People served by Medicaid are U.S. citizens or legal permanent...
patients. The law is named for United States Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
man Pete Stark
Pete Stark
Fortney Hillman "Pete" Stark, Jr. is the U.S. Representative for , serving since 1973. He is a member of the Democratic Party. Currently he is the 5th most senior Representative, as well as 6th most senior member of Congress overall...
, who sponsored the initial bill.
Physician self-referral
Physician self-referralPhysician self-referral
Physician self-referral is a term describing the practice of a physician ordering tests on a patient and having them performed either by themselves or by a facility from which they receive a financial incentive for the referral....
is the practice of a physician referring a patient to a medical facility in which he/she has a financial interest, be it ownership, investment, or a structured compensation arrangement. Critics of the practice allege an inherent conflict of interest
Conflict of interest
A conflict of interest occurs when an individual or organization is involved in multiple interests, one of which could possibly corrupt the motivation for an act in the other....
, given the physician's position to benefit from the referral. They suggest that such arrangements may encourage overutilization
Overutilization
Overutilization refers to medical services that are provided with a higher volume or cost than is appropriate. In the United States, where health care costs are the highest as a percentage of GDP, overutilization is the predominant factor in its expense...
of services, in turn driving up health care costs. In addition, they believe that it would create a captive referral system, which limits competition by other providers. (see physician self-referral
Physician self-referral
Physician self-referral is a term describing the practice of a physician ordering tests on a patient and having them performed either by themselves or by a facility from which they receive a financial incentive for the referral....
)
Others respond to these concerns by stating that while problems exist, they are not widespread. Further, these observers contend that, in many cases, physician investors are responding to a demonstrated need which would otherwise not be met, particularly in a medically underserved area.
Legislation
Congress included a provision in the Omnibus Budget Reconciliation Act of 1989 (OBRA 1989) which barred self-referrals for clinical laboratory services under the Medicare program, effective January 1, 1992. This provision is known as "Stark I". The law included a series of exceptions to the ban in order to accommodate legitimate business arrangements. A number of observers recommended extending the ban to other services and programs. The Omnibus Budget Reconciliation Act of 1993 (OBRA 1993) expanded the restriction to a range of additional health services and applied it to both Medicare and Medicaid; this legislation, known as "Stark II," also contained clarifications and modifications to the exceptions in the original law. Minor technical corrections to these provisions were included in the Social SecuritySocial Security (United States)
In the United States, Social Security refers to the federal Old-Age, Survivors, and Disability Insurance program.The original Social Security Act and the current version of the Act, as amended encompass several social welfare and social insurance programs...
Amendments of 1994.
Passage of Stark II raised a series of concerns on the part of many provider groups. While Stark I and II were intended to remove potential conflicts of interest from physician decision making, a number of persons have argued that the legislation, particularly parts of Stark II, represents an unwarranted intrusion into the practice of medicine. They have stated that the legislation, particularly the provisions relating to compensation arrangements, is too complex and may, in fact, impede physicians' ability to participate in managed care networks.
On November 20, 1995, Congress gave final approval to the conference report on the Balanced Budget Act (BBA) of 1995. President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
vetoed the measure on December 6, 1995. BBA included several amendments to the physician self-referral provisions. The two major changes were the repeal of the prohibitions based on compensation arrangements and the reduction in the list of services subject to the ban.
The Federal Register announced that publication of Stark III has been extended until March 26, 2008, and Phase II will remain in effect through that date.
The Phase III final rule was published on September 5, 2007, at 72 FR 51012, and became effective December 4, 2007.
The Stark Law is related to, but not the same as, the federal anti-kickback law.
Lawyers and laypersons can find the Stark Law which is §1877 of the Social Security Act. Additionally, the regulations are at [42 C.F.R. §411.350 through §411.389].