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Second Opinion

Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

Senate Finance Committee Holds Hearing on Stark Law

July 15, 2016— The Senate Finance Committee held a hearing July 17 to discuss physician self-referral restrictions, otherwise known as the “Stark Law.”

The hearing follows a June 30 white paper released by Chair Orrin Hatch (R-Utah) titled, “Why Stark, Why Now? Suggestions to Improve the Stark Law to Encourage Innovative Payment Models.” The report discusses stakeholder perspectives on how the Stark law is working in practice, and the law’s complexity. The AAMC submitted a comment letter in response to the Senate Finance and House Ways and Means Committees’ request for input [see Washington Highlights, Jan. 29].

In his opening remarks, Chairman Hatch outlined the history of the law, passed in 1989, and its implications today stating, “Because it regulates physicians’ financial relationships, the Stark law has a significant impact on the structure and operation of the healthcare delivery system. Therefore, as we’ve collectively worked to transition our federal health programs toward more value-based payment systems and away from fee-for-service models, one question keeps coming up: In its current form, is the Stark law still necessary?”

Ranking Member Ron Wyden (D-Ore.) focused on finding balance between two key priorities stating, “On one hand, there’s a drive toward bringing doctors and specialists together, promoting coordination, and making health care more efficient whenever possible. On the other hand, there’s a longstanding protection that comes from what’s known as the Stark Law. It says that financial relationships between providers must not influence a patient’s medical care.” He added, “Promoting coordination, and upholding the Stark Law– do not have to come into conflict.”

Johns Hopkins Health System Corporation Deputy General Counsel Peter Mancino, testified on the unique role of the Stark Law in regards to academic medical centers stating, “Now is the time for Congress to modernize the Stark Law to promote fairness and further the goals of MACRA and the Triple Aim. MACRA requires providers to innovate, but we need the tools and the freedom to do so. We urge Congress to act quickly to address our concerns so that the health care industry can transform itself to meet today’s challenges.”

Mancino suggested eliminating the ambiguity of key Stark terms, making Stark penalties more reasonable, and reforming the Stark Law to permit innovative payment methodologies, as ways to improve the Stark Law and allow health care providers to partner with physicians to improve quality and reduce costs.   

Other witnesses included: Troy A. Barsky, partner, Crowell & Moring, LLP and Ronald A. Paulus, M.D., president and chief executive officer, Mission Health.

Contact:

Courtney Summers
Senior Legislative Analyst
Telephone: 202-862-6042
Email: csummers@aamc.org

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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org