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Physician groups attempt end-run around HCFA’s final Stark II regulations
With final regulations on Stark II still on hold, five years after the law was passed, two major physician practice groups are attempting an end-run around the Health Care Financing Administration by taking the case for reform directly to Congress.
The Englewood, CO-based Medical Group Management Association (MGMA) and the Arlington, VA-based American Medical Group Association have launched what they call a "grassroots effort" to strip out the controversial compensation arrangement provision of the law and to get clarification from Congress on how Stark II defines the term "group practice."
The physician groups claim they’ve never opposed the intent of the self-referral laws — "to prohibit abusive joint ventures that lead to overutilization of certain services." They say the lobbying push is necessary because "the complexity of the statute makes education of the physician, administration of and compliance with the regulation, as well as enforcement practically impossible," according to a letter sent April 15 to leaders of the Senate Finance Committee, House Ways and Means Committee, and the House Commerce Committee. (To read the requested changes described in the letter, see page 3.)
"The Stark law was actually intended to simplify things — and of course it has hardly done that," explains Edward Kornreich, JD, a health care specialist with Proskauer Rose in New York City. "The law has become so complicated that it is essentially unworkable."
The physician groups’ plan is to attach a rider amending the Stark II laws to a budget reconciliation bill or other piece of legislation by the end of the current term. And so far, Congressional support for Stark II reform has been strong, says Anders Gilberg, government affairs field representative at MGMA’s Washington, DC, office. "We’ve met with a number of legislators, and virtually all of them have indicated that their constituents and groups in their district are telling them this is a problem," Gilberg says. "They do want to address this issue."
So far, however, the proposed changes have drawn only silence from the law’s author, Rep. Fortney "Pete" Stark (D-CA). While Stark has reviewed the requests, representatives from his office won’t release any public comment on them before meeting with the groups directly.
Gilberg says that while there’s little support for repealing Stark II altogether, "there’s a lot of interest in refining it and cleaning it up." So why not wait until the Health Care Financing Administration issues its final regulations, probably sometime in 2001? Gilberg says that HCFA itself may be confused about what the Stark II regulations mean. The confusing nature of the proposed rules only reflects the vagueness of the law itself, particular with regard to how the law defines group practices and financial relationships between certain entities, Gilberg says.
Kornreich notes that HCFA’s intent in defining "group practice" has been to distinguish between sham practices and legitimate practices. The problem is that the agency’s definition criteria so far have been highly subjective. At one point, the agency floated the idea of requiring that a certain number of physicians be based in each office. "They wanted to avoid group practices without walls, but they eventually recognized that definition wasn’t workable," Kornreich says. Even so, Kornreich maintains that "the only way you can clarify the meaning is to use very objective criteria. We just don’t have those criteria yet."
The physician groups particularly want the "compensation arrangement" section of the law removed because such arrangements have grown so complex that the law is simply unable to adequately address them all, Gilberg says. Besides, he says, "virtually all of those arrangements are already covered under the anti-kickback statute. It’s not like you won’t have a body of fraud law out there to address payment for referrals."
Gilberg cautions, however, that just because a good possibility exists that Stark could change, don’t assume your practice can afford to ignore the proposed regulations. While it’s true that HCFA hasn’t taken enforcement action yet, the agency doesn’t have to wait for the final regulations to launch a crackdown. After all, the law has been on the books since 1995. "Historically speaking, when HCFA does begin to enforce a law, it can go back all the way to the year the law was passed and look at all of your billing transactions potentially as false claims," Gilberg says. "We’re very concerned that people are operating in a vacuum out there, and that when HCFA does start to go after people, they could be liable for all their billings back to 1995."