Final physician self-referral rules better than expected

Government issues long-awaited Stark II final regulations, with more to come "shortly."

By Tanya Albert, AMNews staff. Jan. 22, 2001.

Doctors have about a year to make sure their business practices are in line with physician self-referral law final rules that aim to prevent doctors from sending Medicare patients for medical services to profit.

The law says physicians can't refer patients to places where a doctor or a member of his or her family has a financial interest. But the final rules, issued Jan. 4, create exceptions.

Legal experts say the good news is that the rules appear to be much easier for doctors to comply with than the 1998 proposed regulations.

"The proposed rules three years ago were prepared in a vacuum," said Jeremy Miller, president of Miller Health Law Group in Los Angeles.

The new rules define a group practice in a way that will not force most physicians to reorganize to comply. They also do a better job of defining the exact services to which the law applies, and they are more accepting of referral arrangements if physicians can prove they are charging "fair market value" for a service.

"We didn't get everything we asked for," said health care lawyer Bill Maruca, a director with Kabala & Geeseman in Pittsburgh and an American Health Lawyers Assn. vice chair on fraud and abuse. "But it looks like it's going to be easier to achieve compliance."

Congress passed the first physician self-referral law, named Stark I after its sponsor, Rep. Fortney "Pete" Stark (D, Calif.), in 1989. It dealt with labs.

The latest rules pertain to the Stark II law, passed in 1993. Stark II expanded self-referral laws to 10 other services: physical therapy; occupational therapy; radiology; home health services; outpatient prescription drugs; radiation therapy services and supplies; durable medical equipment and supplies; inpatient and outpatient services; parenteral and enteral nutrients; and prosthetics, orthotics, and prosthetic devices and supplies. [...]