A district court dismissed an oncology trade association's challenge to Stark law guidance prohibiting physicians from dispensing drugs in locations outside of their office on Aug. 30.
The Community Oncology Alliance, a non-profit advocacy group, challenged a set of "Frequently Asked Questions" released by CMS that explained location requirements under Stark law "would not be satisfied if a patient receives an item by mail outside the physician’s office."
The U.S. District Court for the District of Columbia found that HHS’s position rested on a correct interpretation of the Stark law exception allowing self-referrals for in-office ancillary services.
In a suit filed July 2023, the group alleged the government unlawfully extended this prohibition to physicians' mailing of prescription drugs to patients' homes. The suit said that the FAQs violated the Medicare Act and Administrative Procedure Act by changing physician obligations under federal law without undergoing formal notice-and-comment rulemaking.
The 2021 interpretation of Stark law prohibits medication delivery from independent physician practices, which in turn affects patient care. According to a Jan. 30 report in JCO Oncology Practice written by three oncologists, many independent practices are now finding themselves in violation of Stark law because they operate using medically integrated specialty pharmacies to deliver medications to patients by mail or courier.
Before the ruling, some providers felt Stark law was vague about mail-order dispensing by medically integrated dispensaries, according to the JCO Oncology report. While public health emergency laws during COVID-19 allowed mail-order dispensing, the new interpretation confused the issue.