March 24, 2017

States Revisit Physician Self-Referral Bans

State legislatures are considering a variety of physician self-referral bills in 2017. At the federal level, physician self-referral is regulated through the Stark Law, though its application is limited only to Medicaid and Medicare patient referrals. State laws may apply to a broader category of providers and payers (i.e., Medicaid and private payers).

Federal Stark Law, named for its sponsor, former California Congressman Fortney “Pete” Stark, applies only to referrals for “designated health services.” They are limited to the following 12 types of services:

  • Clinical laboratory services
  • Physical therapy services
  • Occupational therapy services
  • Outpatient speech-language pathology services
  • Radiology services, including ultrasound, MRI and CT scans
  • Radiation therapy services
  • Durable medical equipment
  • Parenteral and enteral nutrients, equipment and supplies
  • Prosthetics, orthotics and prosthetic devices
  • Home health services
  • Outpatient prescription drugs
  • Inpatient and outpatient hospital services

At the state level, the definition of “health care services” may vary, and the law can be applied to services not specifically mentioned under Stark Law.

The value of strict self-referral prohibitions is being re-examined as more health care is delivered through coordinated team-based arrangements. The stakeholders are exerting more pressure on state lawmakers to relax existing self-referral statutes to accommodate emerging business arrangements among multi-specialty group practices.

HB 2333 – An act related to unlawful patient brokering and financial compensation.

SB 316 – An act requiring a study regarding referrals by health care providers to certain health care facilities. Its purpose is to require a study of health care provider self-referrals.

HB 403 – For the purpose of exempting, under certain circumstances, a health care practitioner who has a certain compensation arrangement with a health care entity from a certain provision of law that prohibits a health care practitioner from referring a patient or directing certain persons to refer a patient to a certain health care entity.

For information about pending legislation in your state, refer to Statescape for a complete and up-to-date, state-by-state compendium of all proposed health care bills.