Stark law has evolved into a complex framework that continues to challenge physicians, and as regulatory changes and enforcement actions escalate, leaders are grappling with how best to comply with these laws.
"Stark law legislation has become a hydra that has grown more heads with every attempt by the government to fix a specific ill," James McCoughlin, MD, orthopedic surgeon at Panama City, Fla.-based Ivy Spine and Orthopedics, told Becker's. "At some point the government must admit that its tinkering in healthcare has failed and the government should get out of the healthcare delivery business, and simply be a payer if Medicare or Medicaid avenues of care are to remain. Delivery of actual care should be returned to physicians, nurses and other healthcare professionals with the bean-counters reporting to the clinicians, rather than the reverse.
With ongoing changes in the legal landscape, here are five major Stark law issues physicians are keeping a close eye on:
1. The overturning of Chevron deference
The recent overturning of the Chevron deference has left Stark law compliance in a state of uncertainty.
A federal district court ruled that a false claims lawsuit filed against Thomas Health System cannot be resolved until both parties address the Supreme Court’s decision. The Chevron deference, a 40-year-old precedent, required courts to defer to federal agency interpretations of ambiguous laws. With its reversal in July, judges must now evaluate regulations independently rather than deferring to agencies. This shift will likely complicate compliance for healthcare providers navigating Stark law regulations as judges must now interpret these laws without leaning on federal guidance.
Read more here.
2. Increased Stark law allegations
Allegations of Stark Law violations are on the rise, with CMS intensifying scrutiny. In 2023, CMS settled a record $12.56 million in Stark Law-related voluntary self-referral disclosure settlements — a 552% increase from 2021. The Department of Justice has also ramped up enforcement. Financial relationships, particularly those involving physician compensation that exceeds fair market value or varies based on referrals, are key areas of concern. At least 10 multi-million-dollar Stark Law settlements have been reported by Becker’s in the past two years, highlighting the increasing risks for providers.
Read more here.
3. Potential permanent COVID-19 Stark law waivers
During the COVID-19 pandemic, temporary Stark law waivers were put in place to facilitate healthcare delivery. One waiver allowed mail delivery of prescription drugs to Medicare patients and may soon become permanent.
On Sep. 23, the U.S. House of Representatives passed the Seniors’ Access to Critical Medications Act of 2024, which would allow Medicare beneficiaries to continue receiving medications by mail. This legislative development is now under Senate review.
4. Uptick in Stark law revisions
Recent revisions to the Stark law has significantly altered how physicians conduct their practices, according to Matt Mazurek, MD, an assistant professor of anesthesiology at Yale School of Medicine. CMS now uses various formulas to determine general market value, creating new challenges for physicians in structuring financial relationships.
"The recent rule changes have increased the complexity of financial relationships between physicians and other entities," Dr. Mazurek told Becker's. These changes necessitate a deep understanding of both the law and the evolving regulations, as non-compliance can lead to significant penalties.
Read more here.
5. DOJ complaint against Erlanger Health System
The DOJ's recent complaint against Erlanger Health System and Medical Center for Stark law violations raises compliance alarms across the healthcare industry. The complaint alleges that Erlanger employed physicians and received referrals that did not meet any Stark law exceptions, a serious violation. The DOJ's action emphasizes the importance of strict compliance with the law and highlights the growing risk of enforcement.
Here are three key compliance takeaways from the complaint, according to an article from JDSupra, including the need for healthcare providers to regularly review their referral arrangements and compensation structures to ensure they align with Stark law requirements.