What Are Stark Laws? Stark Law is a term used to describe federal restrictions on physician self referral. The laws were originally written by Representative Pete Stark and designed to prohibit physicians from referring Medicare patients for ancillary services to a facility owned by the physician or by a close family member. These laws were written because it was believed that physicians were likely to abuse their power of referral for their own self enrichment. Except for some isolated instances, there was little evidence to support this concern but nonetheless the laws have been written and are being enforced.
There are several exemptions or exceptions to the Stark laws which physicians from many specialties rely on in order to practice medicine in a cost effective way that is convenient for their patients. Extracorporeal shock wave lithotripsy (ESWL) has an exemption which has been maintained even though it was challenged in the courts by the government several years ago.
The in-office exemption is a widely used exemption by urologists. This allows for radiologic services, laboratory services and imaging services to be performed in the physician’s office. Given the benefits to patients in terms of location and efficiency, the in-office exemption is an important statute for urologists and other specialties. The exemptions in the federal stark laws generally allow legitimate practice activities to occur without fear of government restriction.
What Are State Stark Laws?
Several states have state written self referral laws which are often called state stark laws. These state statutes are variable and do not necessarily mirror the statutes of the federal stark laws. From a legal perspective, state statutes are just as important as federal statutes to physicians who practice in that state. They have variable language written by state politicians with “input” from interested parties such as physicians, hospitals, insurers, etc. Some state based statutes have language which can prohibit or restrict urologists and other specialists from performing in-office imaging, laboratory studies and radiation therapy treatments on their patients.
In Maryland, the state self referral laws effectively give radiologists and radiation oncologists a monopolistic power over the ownership of radiation and radiological equipment and facilities. The state statutes in Maryland are much more restrictive than the federal statutes and, as written and interpreted by the Maryland State Attorney General, would interfere with the practice of medicine. Fortunately, the Attorney General’s interpretations of these statutes have been challenged in court and thus far challenges have been successful. This issue in Maryland is still being litigated in the court system and has also spilled over into the legislative arena with radiologists, pathologists and hospitals all trying to impact these state self referral laws to their own advantage.
What Does This Mean To You?
Urologists should find out if there are state self referral statutes in the state where they practice. If these statutes exist, urologists should learn what they say and what impact, if any, they may have on their practice. Most likely, some legal expertise will be necessary to reliably interpret the statutes. One must remember that it is not just the language of the statutes but also previous precedence and interpretations in the courts that need to be considered when trying to understand the implications these statutes have on an individual or group practice. Before a urology practice or any practice considers an expansion of lab services, imaging services or radiation therapy services, both federal and state stark laws need to be considered in that planning.
Another issue that urologists need to be aware of is that some states have certificate of need laws (CON). In some states, the CON regulations only apply to hospitals and other large healthcare ventures but in other states even a single specialty physician owned surgicenter needs to get a CON approval from a state regulatory agency before it can be opened. If a urologist lives in a CON state, they will likely face great resistance from hospitals and other established stake holders if they try open a surgicenter or any other entity which requires CON approval. The underlying principal between the CON laws was that it prevents an oversupply of imaging or surgical facilities, the thought being that if too many facilities are built, costs will rise. In reality, most CON laws protect established entities from competition; the most obvious scenario here would be an individual physician group trying to open a surgicenter which may compete with an outpatient surgical center that already exists in a hospital.
It is very important that urologists consider obtaining legal expertise when interpreting physician self referral laws before making any significant investments or changes to their practices.
