The Stark II reality.

Abstract

The long awaited final regulations in Phase I of a two-phase rulemaking process under the Stark II law were published on January 4, 2001. The Phase I final rules govern interpretation of the Stark law as it is applied to referrals by a physician for designated categories of health services to entities in which the referring physician has a financial interest. These new regulations are of particular concern to specialists, such as orthopaedic surgeons, whose practices are oriented to ancillary services that are considered designated health services, such as radiology, physical therapy and durable medical equipment, and where the availability of clear guidance is essential to ensure that medically necessary care is provided in a manner that complies with law. However, rather than the "brightline" guidance that the healthcare community sought, the new regulations create uncertainty in areas that had not existed before. The new regulations require physicians to evaluate the full range of their business and professional relationships to avoid the risk of nonpayment of claims, civil money penalties, or program exclusion after the effective date of the new regulations.