Morning Briefing
Summaries of health policy coverage from major news organizations
Doctors Still Profit From Medicare Referrals Despite Law
The Wall Street Journal: How Medicare ‘Self-Referral’ Thrives On Loophole
In a letter to a friend, the manager of a Florida urology practice worried in 2010 that her company would attract federal scrutiny for its frequent use of an expensive bladder-cancer test. The manager’s concern involved a program at 21st Century Oncology Holdings Inc.—a national chain of cancer practices—that gives its urologists a financial incentive to order the test from a central in-house lab. A federal law since the 1990s has prohibited “self-referral,” in which doctors can profit from Medicare-reimbursed procedures they order. But 21st Century Oncology and many physician groups around the country have found ways to do it anyway, exploiting an exception to the law in ways its writers didn’t anticipate. (Carreyrou and Adamy, 10/22)
The Wall Street Journal: Pete Stark: Law Regulating Doctors Mostly Helped Lawyers
Pete Stark’s landmark law to curb medical self-referral hasn’t worked out how he planned. His retirement, on the other hand, is playing out just how he’d like it to. “It’s a lot of fun,” the former California Democratic congressman said of life after Capitol Hill during a recent interview. “I’m lazy and just enjoying getting ready for the winter.” Self-referral occurs when doctors refer patients needing services such as lab tests or MRIs to entities from which they benefit financially. The Stark Law, passed two decades ago, sought to ban self-referral when the patient is covered by Medicare or another government plan. But many medical groups have gotten around the law, as the Journal reports in a page-one article today. (Adamy, 10/22)
In related news -
The Denver Post: DaVita To Pay $389M To Settle Anti-Kickback Investigations
Denver-based DaVita HealthCare Partners will pay $389 million to settle a criminal and civil anti-kickback investigation into transactions with doctors spanning nearly a decade, the U.S. Justice Department announced Wednesday. The kidney dialysis company's payment includes $350 million for the settlement and a civil forfeiture fine of $39 million for two joint ventures DaVita entered into with physicians in Denver. "This case involved a sophisticated scheme to compensate doctors illegally for referring patients to DaVita's dialysis centers," U.S. Attorney for Colorado John Walsh said in the release. "Federal law protects patients by making buying and selling patient referrals illegal, so as to ensure that the interest of the patient is the exclusive factor in the referral decision," he said. The settlement resolves allegations regarding the company's arrangements with physicians and physician groups from March 2005 to last February, the U.S. attorney's office said.
