Johns Hopkins, Mission Health urge lawmakers to modernize or repeal Stark Law

Healthcare leaders are concerned that the dated Stark Law will impede efforts to transition to value-based care models.

During a Senate Finance Committee Hearing Tuesday, Chairman Orrin Hatch (R-Utah) said the Stark Law has become too complex, creating obstacles in the transition from fee-for-service medicine to value-based care models.

Echoing Sen. Hatch, Asheville, N.C.-based Mission Health CEO Ronald Paulus, MD, expressed his concerns about the physician self-referral law.  

"As a physician executive I am absolutely convinced that it is simply not possible to transform healthcare without a strong partnership between health systems and physicians. The Stark Law makes this remarkably difficult," said Dr. Paulus. 

The problems with the physician self-referral law can't be fixed by tinkering around the edges, according to Dr. Paulus. He said a full repeal is necessary to allow health systems to transition to value-based care.

Outside of a full repeal, witnesses provided several other solutions during the hearing. For instance, Troy Barsky, an attorney with Crowell & Moring, who referred to the physician self-referral law as a "tortured web of confusing standards," urged lawmakers to change the proportionality of the penalty to the nature of the violation. This would allow provider organizations to avoid astronomical penalties for technical violations of the Stark Law.

Peter Mancino, deputy general counsel of The Johns Hopkins Health System in Baltimore, agreed that now is the time to revisit the Stark Law. He said ambiguities in terms need to be eliminated and penalties under the law need to be more reasonable. Mr. Mancino also urged lawmakers to reform the law to allow for innovative payment arrangements.

The hearing follows a report from the Senate Finance Committee that included Stark Law reform ideas from stakeholders. Sen. Hatch said the committee hopes to introduce legislation reforming the Stark Law by the end of the year. 

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