People usually observe 10th anniversaries with presents and parties, but the decennial of a physician self-referral law has been marked by criticism, not celebration.
The Physician Self-Referral Act of 1989, known as Stark I, was enacted with good intentions. Rep. Fortney "Pete" Stark (D-Calif.) and other lawmakers aimed to stop physicians from referring patients to clinical laboratories in which they had a financial interest. Studies had shown that physicians who owned such facilities referred their patients to them inappropriately, increasing utilization and costs.
In 1993, the Stark II law was enacted, expanding the earlier law by adding 10 potential conflicts of interest, including home healthcare, physical and occupational therapy, and diagnostic services.
But after all the time and effort that have been spent on the laws, people are still struggling to interpret and apply them. More than 200 health lawyers, compliance officers and healthcare executives gathered in Washington at the Health Care Compliance Association's first Stark Reality conference in mid-June to continue the struggle.
Speakers and attendees examined the flaws and ambiguities of the complex and confusing law, seeking guidance from federal regulators and prosecutors who enforce it. Discussions focused on what the Stark laws have accomplished, whether achievements have matched intentions, how the laws have affected healthcare and what lies ahead.
Gabriel Imperato, a lawyer with Fort Lauderdale, Fla.-based Broad and Cassel, said two lawyers in his firm work full-time on Stark issues alone.
"I think Stark can be seen as more of a benefit to lawyers than addressing abuses in the healthcare industry," he said.
Imperato said Stark has failed to stop many of the ventures the government found so troubling.
"I find in dealing with Stark that it may have become obsolete by the weight of changes in the industry," Imperato said. "The law has been outpaced by the evolution of healthcare in the '90s."
Imperato said the laws need legislative review and revision, an opinion widely shared by conference attendees. Until changes are made, healthcare organizations that contract with doctors should develop their deals with Stark liability in mind, he said.
In congressional testimony May 19, McCarty "Mac" Thornton, chief counsel at HHS' inspector general's office, said the primary benefit of the laws is prevention, persuading healthcare organizations to remain in compliance. He said the laws should be simplified and updated but cautioned against changes that would allow physicians to inappropriately increase testing and services.
Prosecutors do not consider the Stark laws to be particularly effective, said Assistant U.S. Attorney James Sheehan, head of the U.S. attorney's civil division in Philadelphia.
"We've never seen government training in Stark," he said. "There hasn't been a concentrated push there."
Sheehan said the laws help in investigating fraud cases such as those involving kickback schemes and medical necessity determinations.
But Sheehan said the Stark laws should not be applied as fraud statutes would be. The Stark laws were designed to emphasize self-compliance and to work without government involvement, he said.
Sheehan said his office isn't hunting Stark scalps. "We're not looking for people pulling the tags off mattresses, and we're not doing Stark either."
Despite such assurances, providers should be cautious, said Edward Kornreich, a lawyer in the New York office of Proskauer Rose. He said the Stark laws are strict and technical.
"It's impossible to meet all their technical requirements, and they have so many elements that can trip you up," he said.
Several lawyers discussed the possibility that whistleblowers could file lawsuits under the federal False Claims Act based on alleged violations of the Stark laws. "Congress never envisioned that private citizens could bring suit based on Stark," Kornreich said.
Richard Kusserow, president of Washington-based Strategic Management Systems and the HHS inspector general from 1981 through 1992, said expansions of a 1977 federal anti-kickback law cover some of the abusive conduct addressed by the Stark laws. As a result, the anti-kickback law and the Stark laws are almost duplicative.
"The anti-kickback law has taken over the role Stark was intended to play," Kusserow said. "We have more and more confusion."
Greg Miller of the Philadelphia law firm Miller, Alfano & Raspanti, said, "This is one instance where (Congress) needs to throw the baby out with the bath water."
William Savaille, a healthcare lawyer in the Washington office of Arent Fox, said many of his physician clients are angry about the Stark laws. "The complications of trying to get a transaction provoked by good intentions through, the financial cost of complying with Stark and the uncertain regulatory climate all weigh heavily on providers," he said.
Some healthcare associations-including the American Hospital Association, the American Medical Association and the American Medical Group Association-are lobbying for congressional relief from some of the laws' more onerous provisions.
Brent Miller, AMGA vice president of public policy, said if the Stark laws were introduced today, Congress would never pass them. He said the time is ripe for a revision.