Hospital leaders urge Congress to remove legal barriers to health care transformation

The Senate Finance Committee today held a hearing on ways to improve and reform the Stark physician self-referral law. Witnesses unanimously recommended that the compensation portion of the Stark law be removed. “The Stark Law imposes substantial limits on a hospital’s ability to participate in innovative payment arrangements with physicians,” said Peter Mancino, deputy general counsel for the Johns Hopkins Health System. Ronald Paulus, M.D., president and CEO of Mission Health in Asheville, NC, said the law “sets up barriers to the necessary alignment between hospitals and physicians that is absolutely essential to transform our delivery system. Because of the extraordinary penalties involved, it often ‘freezes’ health systems in place and absolutely impairs patient care, performance improvement and the shift to value-based payment…Only Congress can remove those barriers.” In a statement and report submitted today to the committee, AHA said the Stark Law “should be reformed to focus exclusively on ownership arrangements.” Compensation arrangements “should be subject to oversight solely under the Anti-Kickback Law,” AHA said and urged Congress to “create a clear and comprehensive safe harbor under the Anti-Kickback Law for arrangements designed to foster collaboration in the delivery of health care and incentivize and reward efficiencies and improvements in care.”