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Advocate Aurora Health exec testifies in support of Stark Law changes

Advocate Aurora Health exec testifies in support of Stark Law changes

Advocate Aurora Health would take on more risk and move more quickly to implement a “truly value-based healthcare system” if certain changes were made to the Stark Law, Chief Integration Officer Mike Lappin testified this week at a U.S. House Ways and Means Health Subcommittee hearing.

The more than two-decade old law regulates physician self-referrals.

Lappin said that new value-based regulations and quality programs have minimized the risk of over-utilization, creating penalties instead of financial reward for unnecessary tests or referrals.

But fear of running afoul of the Stark Law, because of its broad prohibitions and ambiguity over certain provisions, has prevented Advocate Aurora from further advancing its value efforts. Consultant costs to ensure compliance with Stark requirements can exceed $20,000 for a single physician compensation agreement, Lappin said.

“In this new environment, the Stark Law is now impeding our ability to efficiently coordinate care, rather than helping our patients,” Lappin said.

Lappin proposed four changes:

  • Provide the Department of Health and Human Services more authority to grant a broader scope of exemptions from the law for value-based arrangements;
  • Pass legislation distinguishing between substantive and technical violations of the law;
  • Clarify the definition of “fair market value” and other terms used to determine exemptions and compliance with the law; and
  • Develop a more streamlined and coherent fraud and abuse regulatory system.

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