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Hatch Eyes Movement on Stark Law Changes by Year’s End

The Senate Finance Committee could take action before the end of the year on updating a health care fraud law that physicians say complicates the health care delivery system.

Committee Chairman Sen. Orrin Hatch (R-Utah) said at the end of a hearing on the topic Tuesday that the committee would “try to do something about this before the end of the year.” A committee spokesperson did not immediately respond to inquiries about whether Hatch would introduce legislation to amend the law, which was become law in the 1990s.

While legislative time is limited this year, there’s bipartisan interest in addressing the issue.

The Stark law restricts medical referrals of designated health services for Medicare or Medicaid patients if the physician or one of their immediate family members has a financial relationship with the entity they are referring to.

In the current health care system, that means “vast swaths of medicine performed” is potentially illegal, Hatch said. In recent years and under the Affordable Care Act, there’s been a priority on making the health care delivery system more value-based and coordinated.

“Because it regulates physicians’ financial relationships, the Stark law has a significant impact on the structure and operation of the healthcare delivery system,” Hatch said. “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.) said the law presents a challenge of balancing priorities of improving coordination and among providers and making sure financial relationships don’t influence a patient’s care. With more types of providers working together, such as doctors working at the same practice as physical therapists means increases in referrals to such providers shouldn’t necessarily cause a red flag, he said.

“In my judgement, those two important priorities — promoting coordination, and upholding the Stark Law — do not have to come into conflict,” Wyden said. “As long as there are clear guidelines around what’s fair game when it comes to patient referrals and the relationships between doctors, it will be possible to guarantee that patients are getting the care that’s right for them — not for somebody else’s pocketbook. In certain ways, it could be as simple as revisiting the rules that are already on the books.”