Stark resurfaces with new self-referral ban

February 24, 1993

Rep. Fortney "Pete" Stark (D-CA) has reintroduced aphysician self-referral bill in Congress that would prohibit thepractice regardless of who is paying for services. The ComprehensivePhysician Ownership and Referral Act of 1993 (HR 345) would

Rep. Fortney "Pete" Stark (D-CA) has reintroduced aphysician self-referral bill in Congress that would prohibit thepractice regardless of who is paying for services. The ComprehensivePhysician Ownership and Referral Act of 1993 (HR 345) would banreferrals by physicians to any facility in which they have anownership interest.

The bill would bar self-referrals for radiology services, includingMRI, CT and ultrasound. Other prohibited referrals include thoseto clinical labs, physical therapy and occupational therapy, outpatientprescription drugs, durable medical equipment suppliers, parenteraland enteral nutrition equipment and supplies, and home infusiontherapy.

Unlike the existing federal ban on referrals by physician investorsto clinical labs, HR 345 does not stop at Medicare patients. Suchreferrals would be prohibited regardless of whether Medicare,private insurers or HMOs are paying the bill.

Stark, who authored the bill that led to the existing self-referralban, introduced HR 345 in mid-January. He said research documentsshow that up to 25% of the procedures performed on patients inthe U.S. are unnecessary.

"One of the reasons why some physicians perform unnecessaryservices is that they earn a higher profit as a result,"Stark said. "Physician ownership and referral arrangementscost all of us money."

The recent policy turnabout on physician self-referral by theAmerican Medical Association further supports HR 345, Stark said.In December, the AMA House of Delegates reversed an earlier policywhen it voted to brand self-referral practices as "unethical"(SCAN 12/30/92).

But unlike the AMA guidelines, the Stark bill includes no loopholesfor rural facilities that would not exist without physician investors.However, the Congressman may be open to including such a modification,according to a Stark aide.

The bill's prospects for passage are heightened by apparentbipartisan support of such a ban.

Last year, the House Republican Task Force health reform proposalincluded a broad self-referral ban. Health reform proposals introducedby Democratic leaders in 1992 also included self-referral prohibitions,though none as stringent as those proposed by HR 345. Stark'soffering is the only bill introduced in the 103rd Congress thataddresses physician self-referral.