• Stark Law Growing Ever More Complex
  • July 17, 2008 | Author: Thomas H. Hawk
  • Law Firm: King & Spalding LLP - Atlanta Office
  • In the April 30 hospital inpatient rule, CMS proposed some revisions to the so-called "stand in the shoes" rules applicable to physicians and physician organizations. Various provider groups, including organizations representing hospitals and physicians, sent a letter to CMS objecting to a number of CMS's proposed Stark Law regulatory revisions that were published in the April 30 rule. In addition to issues with the substance of some of the changes, the providers indicated that CMS's new approach of annually revising the Stark Law regulations in the payment rules issued annually means that (in the words of the Medical Group Management Association) "there is now virtually never a time when some aspect of the Stark Law is not in a state of flux." MGMA also indicated that, as the Stark Law has evolved over the past several years, the current self referral prohibition regulations are "incomprehensible." The regulatory history of the Stark Law is complex, with Stark I, Stark II Phase I, Stark II Phase II, Stark II Phase 2.5, and Stark II Phase III. Even with all of these regulatory pronouncements, over 16 years after Congress passed Stark II, CMS has yet to issue regulations on a fairly fundamental question facing providers, namely how the Stark Law applies to Medicaid services.

    Indeed, in a November issue of Forbes magazine, Congressman Fortney Pete Stark (D-CA) for whom the Stark Law is named, is quoted as saying "I shouldn't have written that law." In the interview with Forbes, Congressman Stark laments how complicated the regulations have become and criticized the creation of "Stark law firms" to help physician structure arrangement consistent with the referral prohibition. The Stark Law has driven compliance costs of providers up and, because of its complex nature and the sometime conflicting pronouncements coming out of CMS, providers have difficulty determining whether or not a particular arrangement is compliant, and—if it is—how long before CMS makes a change to make the arrangement noncompliant. The constantly changing and, in some cases, ambiguous Stark Law regulations makes planning and structuring future transactions or arrangements difficult—because it is not possible to predict where the law is headed.