The future of Stark law is "clouded by uncertainty" after a district court ruled that a false claims lawsuit filed against Thomas Health System cannot be resolved without parties' briefs on the U.S. Supreme Court's recent overturning of the Chevron deference, according to a September blog post from law firm Hooper Lundy.
Here are five key things to know:
1. In November 2020, a former nurse filed a suit alleging that Thomas Health violated Stark law by employing physicians through compensation arrangements that took referrals into account, among other violations.
2. In July, the Supreme Court overturned the 40-year-old legal precedent known as Chevron deference, which stated that during disputes over the regulation of ambiguous laws, judges should defer to federal agency interpretations when reasonable. This ruling requires judges to "carefully consider the regulations without blindly referring to any agency interpretation," Mr. Goodwin noted. As a result, the parties involved are required to submit supplemental briefings by October 4.
3. The Stark law framework is described as "relatively skeletal," according to the blog post, and its application is often ambiguous. Although Stark law regulations have evolved over more than 30 years to clarify areas of uncertainty, the repeal of Chevron deference has made these regulations even more ambiguous.
3. "The uncertainty created under the Stark Law in the wake of Loper Bright is potentially a double-edged sword," the post states. This uncertainty may provide latitude for a provider's course of action if they wish to pursue something that contravenes the statute as interpreted or implemented by regulations, but which might be permissible under an alternative interpretation of the statute. However, a provider could find themselves unprotected if they plan to proceed with actions based on a CMS regulatory exception that may have an uncertain statutory basis.
5. The law firm urges providers to consider how their arrangements could be evaluated under the statute itself, rather than solely relying on existing regulations.
"Ironically, this may mean that Stark law compliance efforts could be coming back around to where they began 30 years ago," the post concludes, "with providers struggling to comply with the Stark law but lacking clear regulatory guidance, alongside a statute that leaves many questions unanswered."