Budget politics are jeopardizing a measure that would roll back bans on physician self-referrals, making physicians, group practices and other providers anxious.
Some provider groups last week were talking with congressional and administration officials in an effort to make sure regulatory-relief measures are included in the smaller budget bills that Congress may consider during the rest of its 1996 session.
Congressional Republicans' balanced-budget plan included a measure that would repeal parts of laws barring physicians from referring Medicare patients to clinical laboratories and other service providers in which they had a financial interest or were receiving compensation. The laws were passed in 1989 and 1993.
But the budget standoff between President Clinton and the Republican congressional leadership will sink the rollback of the so-called "Stark I" and "Stark II" laws if a deal can't be struck on a broad budget measure or smaller bills designed to keep the government running through the fiscal year.
"In the absence of legislation, we don't think what's going to come out of the administration is going to be helpful," said Robert Doherty, vice president for governmental affairs and public policy at the American Society of Internal Medicine. "The status quo prevails, and the status quo is not good."
Named for its author, Rep. Fortney "Pete" Stark (D-Calif.), Stark I prohibited physicians from referring Medicare patients to clinical laboratories in which the doctors own an interest. Stark II expanded the self-referral ban to include home care, occupational and physical therapy, hospital care and six other services.
Under Congress' balanced-budget bill, physicians could refer Medicare patients to providers from which they receive compensation, but they still would be barred from referring those patients to providers in which they had a financial stake.
That proposed rollback would allow group practices to pay their doctors based on productivity without running afoul of the law. The law now prohibits such compensation arrangements because, in theory, they are an incentive to increase referrals.
The Republican balanced-budget bill also reduces the number of services covered by the ban, ending it for prosthetic devices, home health services, outpatient prescription drugs, inpatient and outpatient hospital services, radiation therapy services and durable medical equipment. The prohibition would remain for clinical laboratories, outpatient physical and occupational therapy, radiology, and parenteral and enteral nutrient services.
James Gaynor, a partner in the health law group of McDermott, Will & Emery in Chicago, said provider groups were working on a compromise proposal that would retain the prohibition on doctors receiving compensation from providers to which they refer Medicare patients. But the proposal would give providers more flexibility by including a broad exemption to that ban, he said.