Many physician leaders are struggling with the paradox of insurance companies and private equity firms acquiring physician practices, while physicians themselves are barred by Stark law from owning or referring to healthcare entities in which they have a financial interest.
“We’ve created a system where for-profit entities can have healthcare ownership,” Marc Greenberg, MD, an orthopedic surgeon in Baltimore told Becker’s. “But the people who took an oath to serve the patient — who’ve shown a commitment to caring — can’t.”
This paradox is increasingly drawing scrutiny as consolidation accelerates and independent physician practices increasingly vanish under the pressure of regulation, reimbursement cuts and administrative burdens.
For many physicians, repealing or reforming the Stark law, originally designed to curb financial conflicts of interest, has become a rallying cry.
Dr. Greenberg believes repealing portions of the Stark law would “change the reality for certain physicians,” especially in high-revenue specialties like orthopedics. When physician groups own their own hospitals, he said, their financial trajectory and clinical autonomy look vastly different than groups beholden to corporate owners.
“The pressure to sell to private equity is way lower,” he said. “I think repealing [parts of Stark] would be fantastic.”
What began as an anti-kickback safeguard has morphed into a complex and vague statute, Dr. Greenberg said.
“Every time they want to do something non-standard, they have to go to their lawyers,” he said. “That creates cost — again, even when their intent isn’t bad. But the law doesn’t care about intent. Just each occurrence.”
Stark law enforcement surged in 2024, marked by 979 whistleblower lawsuits and $2.92 billion in False Claims Act settlements. Many of these cases were driven by whistleblowers, not agencies themselves, further underscoring the high-stakes environment physicians operate within.
Historically, enforcement leaned heavily on dual violations, Stark and anti-kickback statutes, but the last two years saw increased prosecution for Stark violations alone. The law’s complexity, combined with vague language and steep penalties, has become a regulatory minefield.
Additionally, legal interpretations and the Supreme Court’s Loper Bright decision (which weakened deference to federal agencies) are also shaping enforcement. Defendants now challenge the legitimacy of CMS guidance, creating new uncertainties.
While CMS has taken steps to clarify Stark law, including issuing rare advisory opinions, these moves are limited, as only 20 such opinions have been issued since the advisory process began.
In a rare, positive development, CMS clarified that the “Payments by a Physician” exception is broader than previously thought — allowing more flexibility for fair-market transactions without written contracts or proof of commercial reasonableness.
However, even these steps fall short for many physician leaders. In ASCs, Stark law continues to impede physician involvement. Neal Kaushal, MD, a gastroenterologist in California, argued that the law should be revisited to better support physician participation in ASC development, especially as colorectal cancer screening shifts to these settings.
“Given that the GI industry – especially with respect to CRC endoscopic screening programs – is shifting dramatically toward the ASC environment, having physician input and buy-in will be essential in forming lasting partnerships between health systems, payers, and patients across the GI care continuum,” he said.
Organizations like the Medical Group Management Association are demanding change. Its 2025 Advocacy Agenda calls the law a “major regulatory burden,” especially for independent group practices. With bipartisan support already emerging, such as a 2024 House bill aimed at expanding in-office exemptions, the door may be opening for Congressional action.
Whether reform will come in the form of statutory repeal, regulatory reinterpretation or gradual erosion through litigation remains to be seen. But the current structure seems increasingly unsustainable.
