The Stark anti-kickback law may be changed as the healthcare industry moves away from fee-for-service. It is not likely to be scrapped altogether.

• New care models lessen the need to monitor orders for possible kickbacks.

• The government is likely to add more exceptions to the law.

• Compliance may become more challenging as the exceptions grow.

Efforts to move away from the fee-for-service model may lead to changes in the Stark anti-kickback law, an attorney explains. Expect more exceptions and exclusions that will in some ways make the law less onerous but no less difficult when ensuring compliance.

The House Ways and Means Committee met recently to discuss the need to modernize the Stark Law — federal legislation that aims to prohibit physicians from making referrals for certain health services payable by Medicare to an entity with which they (or their family members) have financial relationships.

The Centers for Medicare & Medicaid Services also sought public comment on how to address undue regulatory burden as a result of this physician self-referral law. Changes to the Stark Law will affect how risk managers guard against potential liability related to kickback allegations, says Ron Lebow, JD, senior counsel in the Health Law Group with the Greenspoon Marder law firm in New York City.

The effort to reduce reliance on the fee-for-service payment model could loosen some Stark restrictions, which would be good news for some healthcare organizations, he says.

“If there was a financial incentive to order more testing or services, it cost the government more money, and so the Stark Law has been in place a long time to discourage the kind of payments that result in excess services,” Lebow says. “The Stark Law worked in the sense that it prevented incentives to make more money, but it sometimes got in the way of medically necessary services because certain parties couldn’t do things unless they fell in line with every bit of criteria to make it legal. Even the legislators who championed Stark regretted how it just became this monster.”

Reducing the use of fee-for-service could make Stark less important to protecting the government’s interest, and therefore the law could be made more palatable to healthcare providers, he says.

“If you don’t get paid per click for everything you order, then why does anybody care how much you order, at least as it concerns about getting kickbacks? If we’re going to transfer to bundled payment models, risk-sharing models based on capitated payments, or courses of care models, then they should be able to order anything they want because it’s not going to cost the government more money,” he says.

However, do not expect the government to just say the Stark Law is no longer needed.

“They are so afraid of scrapping the whole thing that I’d expect them to just keep adding more and more exceptions and criteria related to consumer protection,” Lebow says.

“It will become a boondoggle of regulatory compliance, but without clear guidance that account for these changing models of care, everyone is going to be too fearful to jump in these new arrangements with the fear of huge civil liability hanging over them. The government is going to keep taking on exceptions to make people feel they’re safe in what they’re doing, even though it would be cleaner to scrap the whole thing.”


• Ron Lebow, JD, Senior Counsel, Health Law Group, Greenspoon Marder, New York City. Phone: (212) 524-5088. Email: ron.lebow@gmlaw.com.