Stark law was built to guard against financial conflicts in a fee-for-service world, but as healthcare shifts toward value-based care, many physicians say the decades-old framework is creating new friction.
Physician leaders told Becker’s that the law’s strict liability standard, complex fair market value requirements and technical compliance rules can discourage innovation and slow care redesign. Even minor missteps may carry outsized financial and legal risk, they said. At the same time, physicians emphasized that the law’s intent remains important. The challenge, they said, is that Stark has not kept pace with how care is delivered today.
Five physicians joined Becker’s to share their biggest concerns about how the Stark law is affecting physicians and physician organizations today.
Question: What concerns, if any, do you have about how the Stark law is affecting physicians and physician organizations today?
Editor’s note: Responses have been lightly edited for clarity and length.
Peter Bravos, MD. Chief Medical Officer of Sutter Health’s Surgery Center Division (Yuba City, Calif.): The Stark law was designed to prevent financial conflicts in a fee-for-service healthcare system. While its purpose remains valid, strict liability framework no longer reflects how care is delivered today. Even minor technical errors may trigger mandatory repayment and potential False Claims Act exposure, regardless of intent or patient harm. This creates a significant compliance burden and discourages participation in today’s more innovative, value-based care models.
Jim Freund. Managing Partner at Physician Transaction Advisors (Madison, Conn.): AI has dramatically increased the number of audits taking place, and we know of several groups that have been adversely impacted. We are aware of two groups whose ancillary testing has fallen outside the industry norm and have been removed from payor plans as a result, even though they are highly reputable and insist that the tests are both necessary and defensible. It is something that groups have to be very aware of and should ensure that they are within appropriate limits.
Ahmad Maarouf, MD. CMO of Henry Ford Wyandotte (Wis.) Hospital: In my view, the Stark law served an important purpose when the healthcare system was primarily structured around a fee-for-service model. As the industry transitions toward value-based care and population health management, the law is increasingly limiting innovation.
Physicians and physician organizations are often constrained by the technical requirements of the Stark law, which can inhibit creative and forward-thinking approaches to delivering high-quality, cost-efficient care. The financial risk inherent in value-based and population health models presents a significant barrier, particularly when physicians and physician organizations are unable to enter into arrangements with third parties that are willing to share or assume that risk.
Additionally, the Stark law may restrict the formation of these collaborative relationships on technical grounds. The fair market value requirements can further complicate such arrangements, as they may not adequately capture or assign value to the efforts and infrastructure required for successful value-based initiatives. Population health and value-based models inherently consider the number of covered lives, indirectly tied to referral volume, which conflicts with current Stark law compliant FMV standards.
Harpreet Pall, MD. CMO of Jersey Shore University Medical Center and K. Hovnanian Children’s Hospital (Neptune, N.J.): While the Stark law continues to serve an important purpose in preventing inappropriate financial relationships and protecting patients, its complexity and rigidity often create friction for physician organizations trying to innovate. Many contemporary care models, including clinically integrated networks, value-based arrangements and service line structures, require significant legal interpretation and compliance infrastructure to operationalize collaborations that are fundamentally aligned with quality and value goals. For physicians, this can translate into administrative burden, slowed program development and hesitancy to pursue potentially beneficial partnerships, even when patient interest is clearly at the center.
Esme Singer, MD. CMO of Temple Faculty Physicians at the Lewis Katz School of Medicine (Philadelphia): This is actually extremely timely for us as we are working to expand our navigation programs for our patient population, which experiences significant social determinants of health barriers and low medical literacy. We often know what care patients need and we have the ability to help facilitate care, but doing so requires building additional workflows solely to ensure compliance with the Stark law. The added layer is administratively burdensome and time-consuming, and in practice it can slow care delivery and make it harder to implement innovative, responsive care models.
While I appreciate the original intent of the law, it seems misaligned and antiquated given how care is delivered and reimbursed today. Additionally, it seems inconsistent with what our patients actually want, which is help navigating the medical system. Without support, scheduling and coordinating care on their own can be confusing, time consuming and is associated with longer delays. This is bad for patients, especially among our vulnerable populations here at Temple.
