Since its passage in 1989, the now ubiquitous federal law known as the Stark Law has driven the business behavior of health care providers of many kinds. Recent developments, however, make us wonder whether the end of Stark is near, and if so, whether that’s a good thing.
By way of background, the Stark law has two components: part one, a self referral prohibition, generally forbids physicians from referring to a provider of any “designated health service” (DHS) (e.g. MRI, PT, clinical lab) if the physician or his/her immediate family member has a financial relationship (including ownership interest) with the provider of the service. Part two mandates that certain compensation arrangements between healthcare providers meet certain requirements. Things like medical director agreements, management agreements, employment and independent contractor arrangements have been regulated by the law since its inception. Most notably, for purposes of this article, one provision (the “In Office Ancillary Services” exception or “IOAS”, also known as the “Group Practice Exception”) has allowed medical practices to provide all sorts of “ancillary services” to their own patients. That is the key aspect of the law that is lately coming under serious attack. Continue reading