Surfing Stark II: prohibition against self-referrals

In 1989, the Chairman of the House Ways and Means Subcommittee on Health, Fortney (Pete) Stark (D.-Calif.), turned the health care industry on its ear by introducing the "Ethics in Patient Referrals Act" to Congress. The bill, commonly known as "Stark I," prohibited physician referrals to entities in which they held a financial interest. As Stark's bill made its way through Congress, its substance was dramatically reduced by the legislative process. Ultimately, the law was incorporated as part of the Omnibus Budget Reconciliation Act of 1990. Stark I's main thrust is that it bars physicians from referring Medicare patients to clinical laboratories with which they have a financial relationship. Furthermore, laboratories providing those services must report information concerning any ownership arrangements between the referring physician and the laboratory. Now, to complicate the picture, providers must contend with amendments to the original law that extend the reach of its prohibitions. Called "Stark II," these amendments took effect on January 1, 1995. In this article, guidelines for dealing successfully with the requirements of the law are outlined.