Proposed federal regulations to enforce a ban on self-referrals of Medicare and Medicaid patients will cripple integration and innovation in the healthcare sector, provider groups have told HCFA.
In their official responses to HCFA's proposed regulation to enforce the "Stark II" self-referral law, the pro-vider groups said the rule doesn't provide enough flexibility to allow them to adapt and consolidate services as they attempt to control costs and improve quality in a managed-care setting.
Named for its sponsor, Rep. Fortney "Pete" Stark (D-Calif.), the law bars physicians from referring Medicare and Medicaid patients to providers of 11 types of healthcare services in which the physicians own an interest.
Officially effective in January 1995, Stark II bars self-referrals to such providers as diagnostic imaging, physical therapy and home health agencies.
It builds on the Stark I law, which banned self-referral to clinical laboratory services. Under both laws, such referrals are considered to be violations of federal anti-kickback law, which bars any form of remuneration to induce Medicare or Medicaid referrals.
Topping the objections of the American Hospital Association and the Federation of American Health Systems to the Jan. 9 rule was HCFA's language prohibiting physicians who hold an ownership stake in a hospital from referring patients to a home health agency or other subsidiary the hospital owns.
The AHA's comments, signed by Executive Vice President Richard Pollack, said HCFA's interpretation of Stark II "imposes an unreasonable barrier for hospitals seeking to provide a full continuum of care."
The American Medical Association, meanwhile, objected to a HCFA definition of "referral" that includes restricted professional services provided by physicians themselves.
"We believe there is little likelihood for overutilization of services where a physician is spending his or her own professional time on personally delivering the service," said Lynn Jensen, the AMA's interim executive vice president.
HCFA published its regulatory proposal in the Jan. 9 Federal Register and initially gave providers 60 days to comment. On March 10, HCFA extended the deadline to May 11, citing the complexity of the regulation and providers' requests for additional time.