Georgia Stark Law and Physician Self-Referral Attorneys
The Senate Report is, at a minimum, a strong indicator that calls for change in the law are heard and efforts are underway to evaluate improvements to the law.
A Brief History of Stark Law
Stark Law is Federal physician self-referral law premised upon the notion that physicians are prone to order (i.e., “refer”) more medical items and services if they stand to benefit financially from doing so. For example, where a physician has an ownership interest in a lab to which he refers patients, he will incentivized to send more patients to the lab for lab work.
Thus in 1989 Representative Fortney “Pete” Stark (D-CA), of whom the statute was named, proposed the law to address two perceived adverse consequences of financial incentives for physician self-referrals of medical items and services reimbursed by a Federal healthcare program: (1) overbilling of Federal healthcare programs; and (2) the provision of medical services that do not benefit a patient. Stark Law, Section 1877 of the Social Security Act, codified at 42 U.S.C. § 1395nn, as originally passed, was a fairly straightforward and narrow prohibition that precluded a physician from referring patients or specimens to clinical labs, including physician office labs, where labs paid for by fed programs (Medicare, Medicaid, or CHAMPUS) if the physician (or immediate family member) had a “financial relationship” with the lab. Indeed, Pete Stark declared in sponsoring the law that the intent was to create a “bright line” standard that would benefit physicians and protect Federal healthcare programs. But the law did not remain simple and expanded from the straightforward lab referral context to apply to a list of services and items known as “Designated Health Services,” identified by CMS billing codes.