February 1998 AAOS Report
HCFA submits proposed ruling of "Stark II" laws
The Health Care Financing Administration (HCFA) has
issued its proposed ruling on how the "Stark II"
physician self-referral law will be enforced by the government.
A detailed analysis of the proposed ruling will be on the Academy’s
home page at http://www.aaos.org in the "What’s
New This Week" section in February. The law prohibits physicians
from referring Medicare and Medicaid patients to facilities in
which they have or a member of their immediate family has a financial
interest. In its preliminary review of the proposed rule, the
Academy’s Washington’s D.C. office indicates many
of the concerns of the orthopaedic community have not been adequately
addressed. In 1995, former Academy president James W. Strickland,
MD, told a congressional subcommittee of problems with provisions
of the law on compensation arrangements, durable medical equipment
and shared facilities. The preliminary review found that the only
orthopaedic concern addressed involves providing crutches to patients.
The proposed rule would allow an exemption for crutches if they
are supplied consistent with the in-office ancillary services
requirements of "Stark II" and the physician does
not get direct or indirect profit from furnishing the crutches.
The review also found HCFA takes a broad view of what should be
considered remuneration even if it does not result in net profits.
A public comment period on the proposed rule ends March 10.