Stark bill drives on fast but rough track

June 16, 1993

Federal legislation that would ban physician self-referral regardlessof the payer is moving quickly through Congress, although theroad it travels is rocky. Legislation sponsored by Rep. Pete Stark (D-CA) that wouldprohibit physicians from referring to

Federal legislation that would ban physician self-referral regardlessof the payer is moving quickly through Congress, although theroad it travels is rocky.

Legislation sponsored by Rep. Pete Stark (D-CA) that wouldprohibit physicians from referring to facilities in which theyhave an investment interest is part of President Clinton's deficitreduction package, which narrowly passed the House of Representativeslast month. The legislation is under consideration in the Senate,and if Clinton is able to muster the votes, the package couldbe passed by early next month.

Stark earlier this year amended his Comprehensive PhysicianOwnership and Referral Act of 1993 (HR 345) into Medicare legislationthat is part of the deficit reduction package (SCAN 5/5/93). Thelegislation was also amended to move the effective date of thebill to Dec. 31, 1994. A previous draft had allowed for a two-yeardivestiture period.

Federal self-referral law now in place applies only to Medicarepayments for clinical laboratory services. Medicare antifraudand abuse regulations restrict payments for self-referred servicespaid for by that government program.

Opposition to a federal ban has evaporated over the past yearin the face of mounting evidence that physician self-referralleads to overutilization of health-care services. The GeneralAccounting Office in April released a study of imaging servicesreferral patterns in Florida that found considerably higher utilizationrates for self-referring physicians.

"It's been clearly demonstrated that all the problemswith self-referral are quantifiable and all of the purported benefitsof self-referral have not materialized," said an aide toStark. "The profession has recognized that it's somethingthat people shouldn't do."

Incorporating the bill into Clinton's deficit reduction packageis a risky strategy for Stark, however. While bipartisan supportfor a self-referral ban exists, congressional backing of Clinton'seconomic plan is far more shaky. Should Clinton's plan be shotdown, the self-referral ban would go with it.

HR 345 remains a freestanding piece of legislation in the HouseWays and Means Committee, the aide said. If the deficit reductionpackage fails, Stark would start again with HR 345.

Efforts to ban self-referral in California are also movingforward. Language that would prohibit self-referral for workers'compensation cases has been included in a legislative packageunder development that would overhaul the state workers' compsystem. In addition, longtime self-referral foe AssemblywomanJackie Speier (D-San Mateo) is sponsoring a freestanding bill,AB 919, that would ban the practice in the state.

The Speier bill has passed out of committee and is on the floorof the state Assembly, while the workers' comp overhaul is beinghashed out by a conference committee comprising members of bothhouses of the Legislature.