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The Impact of Representative Pete Stark on Health Care Law and Policy

There has been an awful lot of news lately, so the death of an 88-year-old former Congressman may have escaped your notice. I almost missed it as well. All the more reason to pause for a moment and consider the impact of Representative Pete Stark on health care law and policy.

Mr. Stark is responsible for COBRA coverage, which allows you to maintain your health care if you lose your job. He may not have done it alone, as no legislator does, but he is widely credited with being a driving force behind that idea. In addition, as people studying the False Claims Act know, he led the fight to make physician self-referral illegal. The current version of this is often called “The Stark Law” – yes, named after him.  The Stark law is highly technical and keeps getting more technical as various entities do everything they can to make it less potent. Meanwhile, everyone else scrambles to apply it to situations in which a physician acts more out of personal financial interest than out of concern for their patient.

I learned a lot about Mr. Stark’s career in reading obituaries of him, but sadly, the Washington Post did not mention this legislation.

Though the law is not formally known as the “Stark Law,” you would be forgiven for thinking it is if you typed anything about it into your search engine and because we refer to it that way in False Claims Act complaints and briefs. The law itself can be found at 42 U.S.C. § 1395nn. The law makes referrals by physicians for specific Designated Health Services to an entity in which they have a financial interest illegal. It holds both the physician and the entity liable for such referrals and a violation of Stark Law is also a violation of the False Claims Act. Many safe harbors to this general rule and a continuing effort to weaken the law make its application technical, but a violation of this law, unlike the Anti-Kickback Statute, does not require proof of intent. Therefore, the Stark Law has done a lot to force health care providers to consider what they are doing before they violate it.

Mr. Stark was a special case, as not many congressmen could be described as having among the most liberal voting records in Congress while having started off as successful bankers. The Washington Post focused on comments he made over a 40-year career as a Democratic Congressman, some of which he would be unlikely to make today and some we wish he hadn’t. He was eventually defeated in an open primary by Congressman Eric Swalwell in his California district, and his propensity for what the Washington Post called his “caustic” statements probably earned him as many enemies as his political views.

Frankly, though, this law we use his name to cite all the time is a powerful legacy that few are likely to match and it seems strange the paper omitted it from his obituary.  The forces aligned against strong enforcement of the False Claims Act are currently proposing amendments to the Anti-Kickback Statute, which Pete Stark will not see nor be able to offer an opinion, just when we could use a little support for strong anti-fraud provisions.

It seems like a good time to review what is and is not a Stark Law violation and try to bring forth good cases to improve health care, just the kind of cases Mr. Stark made possible.