HHAs can expect rollback next year of self-referral laws
By MATTHEW HAY
HHBR Washington Correspondent
WASHINGTON Home health agencies and other providers struggling to comply with Medicare’s self-referral laws will be relieved to know that Health Care Financing Administration (HCFA; Baltimore) Deputy Director Kathleen Buto promised the House Ways and Means Health Subcommittee last week that the agency would publish regulations for the troublesome 6-year-old legislation sometime next year. But if Republicans on the subcommittee have their way, the self-referral laws will be pared way back and perhaps even eliminated.
"The only question now," said one aide to the subcommittee, "is whether it will be modified, reduced, or eliminated." Another aide to the subcommittee’s minority staff was even less sanguine. "I don’t see how it can survive in its current form," said the staffer.
In 1989 and then in 1993, Congress passed what became known as "Stark I" and "Stark II" after the law’s main sponsor, Rep. Pete Stark (D-CA). The laws sought to block physicians from inappropriately referring patients to facilities where they had a financial interest. In 1993, the law was extended to include home health agencies, durable medical equipment companies, and numerous other providers. But in the years since, HCFA has failed to issue a final rule, and Health Subcommittee Chairman Bill Thomas (R-CA) and his colleagues say that fact alone proves the law itself is far too complex.
"We are well aware is has been too long," Buto conceded. But that did not temper the assault by Republicans.
"I am appalled that we could pass a law and not tell people what it means for six years," exclaimed Rep. Nancy Johnson (R-CT).
Thomas also wasted no time letting Buto and Chief Counsel to the Inspector General, D. McCarty (Mac) Thornton, know what he thinks of the self-referral laws at the May 13 hearing. He blasted HCFA not only for taking six years to develop regulations for the law, but, more fundamentally, for hanging on to a regulation that has proven to be misguided and inoperable. "Our goal is the same," he said, "but your role is the defense of the indefensible. If not, give us the regulations."
Rep. Johnson was equally direct. "Not all self-referral is bad," she said. "You are asking a small VNA that wants to merge with another VNA how to do it, and it has taken you six years to figure out how to do that. It is discouraging to hear you are so tied up with doing something that is so misguided."
"These laws were meant to produce a bright line,’ but we are farther from that than in any other area of healthcare," Thomas said. "Doctors and hospitals are overwhelmed with overlapping state and federal laws and red tape, including the perplexing self-referral law, that drive up the cost of healthcare at the very time we are trying to make it more affordable."
The fundamental problem with the law, say its critics, is that it is too complex and that HCFA continually tries to clarify it by creating more exceptions. "At what point do all these exceptions swallow the idea?" Thomas asked Buto. Instead, he said the law itself may simply be irretrievable. "Is it possible that the bright line’ we are looking for is compensation and not ownership?" he asked.
Moreover, Thomas and other subcommittee members argued that the law flies in the face of the federal government attempts to encourage a healthcare system with a more coordinated, integrated approach between physicians, hospitals, home health agencies, and other providers.
Stark, the ranking Democrat on the committee who wrote the original legislation, attempted to defend the law that unofficially bears his name. He said the law itself has prevented billions of dollars in fraudulent arrangements, but conceded it might be appropriate to revisit certain aspects of the law.
But one attorney present at the hearing pointed out that even Stark’s own testimony included four suggestions for additional exceptions to the law. Equally ominous was the row of empty seats on Stark’s side of the aisle as Republicans took turns blasting the law that bears his name.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content