On July 17, the House Ways and Means Health Subcommittee held a hearing to discuss modernizing the “Stark law,” an anti-kickback law that prohibits doctors from referring Medicare patients to hospitals, labs, and colleagues with whom they have financial relationships. The law also prevents hospitals from paying clinicians more for meeting certain quality measures and less to those who miss the goals. Clinicians and hospitals can be found liable for violating Stark without intent, and offenses can carry significant financial penalties.
A urologist from Cincinnati told lawmakers that the 30-year-old Stark law was written during the fee-for-service era and is now making it difficult for physicians to participate in alternative payment models (APMs). He said the law does not reflect the vision of coordinated care, noting that only 5 percent of US physicians participate in an APM, and recommended that Congress allow hospitals to use Medicare funds to reward or penalize physicians who are part of value-based care models.
US Department of Health and Human Services (HHS) Deputy Secretary Eric Hargan agreed that the law was not designed for a health care system that is transitioning toward a value-based payment model. While he said the law needs to be updated, he urged lawmakers to ensure that competition in the health care marketplace is preserved.
The chief integration officer of Midwestern health system raised concern that the law can discourage physicians who fear potential financial penalties from entering into value-based arrangements. He also suggested that legislation defining “noncompliance” could help clarify regulatory enforcement and allow government entities to focus on violations that harm patient care.
In the coming months, HHS plans to draft a rule to reduce the burden of the law, which also will reflect responses to its earlier request for information (RFI).