The beginning of the end of all physician ownership of their on work and control of their professional work was the implementation of the STARK LAWS. The beginning of the end as it tried to prevent doctor control… it granted the hospital and insurance industries total power: ChatGPT explains it best:
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1. What are the Stark Laws (in plain English)?

The Stark Law (officially the Physician Self-Referral Law) prohibits physicians from referring Medicare or Medicaid patients to entities with which they (or their immediate family) have a financial relationship, unless a very specific exception applies.

If a referral violates Stark:
•The claim cannot be paid
•Any money received must be refunded
•Penalties can apply even if there was no intent to defraud

That last part is key: Stark is a strict liability statute.

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2. Historical background: why Stark exists

The problem Congress thought it was solving (1970s–1980s)

In the late 20th century, lawmakers became concerned that:
•Doctors were owning imaging centers, labs, DME companies
•Doctors might order more tests or services when they personally profited
•Medicare costs were rising rapidly

The fear was overutilization driven by ownership, not medical need.

This concern was economic, not ethical:
•“If you own the MRI, you’ll order more MRIs.”

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3. Birth of the Stark Law

Stark I (1989)
•Sponsored by Rep. Pete Stark
•Narrow focus:
•Clinical laboratory services only
•Medicare patients
•Targeted physician ownership + referrals

Stark II (1993–1995)
•Massive expansion
•Applied to:
•Medicaid as well as Medicare
•A broad category called Designated Health Services (DHS)

DHS includes:
•Imaging
•Labs
•DME
•Home health
•PT/OT
•Radiation therapy
•Hospital services
•Outpatient drugs
•More

This is when Stark became the monster compliance regime doctors know today.

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4. What makes Stark different from other fraud laws

1. Strict liability (this is huge)

Unlike:
•Anti-Kickback Statute (AKS)
•False Claims Act (FCA)

Intent does not matter under Stark.

If:
•A prohibited financial relationship exists
•A referral happens
•A claim is submitted

→ Violation, period

You can violate Stark while acting in good faith, following medical judgment, and trying to help patients.

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2. Ownership and compensation are both regulated

Stark covers:
•Equity ownership
•Debt
•Leases
•Employment compensation
•Medical directorships
•Productivity bonuses

Anything that ties money to referrals is suspect unless it fits an exception.

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5. The exceptions (and why they’re so painful)

Stark is written as:

“You may not do X — unless you fit exactly into Exception A, B, or C.”

Exceptions include:
•Bona fide employment
•Fair market value compensation
•In-office ancillary services
•Group practice rules
•Academic medical centers

Each exception has:
•Highly technical requirements
•Documentation rules
•Timing rules
•Valuation rules

Miss one checkbox → violation.

This is why lawyers, not doctors, effectively govern compliance.

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6. The real philosophical meaning of Stark

At its core, Stark reflects a belief that:

Physicians cannot be trusted to separate financial interest from clinical judgment

That belief is not applied equally across professions.

Compare:
•Lawyers → allowed to share fees with partners, firms, contingency interests
•Hospitals → allowed to own everything and employ physicians
•Insurers → allowed to control payment, networks, utilization

But physicians are uniquely restricted from ownership and profit tied to referrals.

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7. How Stark reshaped medicine (unintended consequences)

1. Accelerated hospital employment
•Hospitals can own services
•Hospitals can employ doctors
•Doctors cannot reciprocally own hospitals

Result: massive physician employment shift.

1/ Continued explanation of Stark Laws:

3. Rise of non-physician control

Ironically:
•Stark limits physician financial control
•It does not limit insurer or private equity control

So the law meant to protect independence arguably:
•Weakened physician autonomy
•Strengthened corporate medicine

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8. Why doctors feel Stark is unfair

Doctors often say:
•“I’m prohibited from benefiting from efficiency.”
•“Hospitals can do this, insurers can do this, but I can’t.”
•“I’m punished for ownership, not behavior.”

And they’re not wrong.

There is no evidence Stark reduced:
•Total healthcare spending
•Overutilization at scale

But there is strong evidence it:
•Increased administrative costs
•Encouraged consolidation
•Shifted power away from physicians

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9. Where Stark stands today
•Stark is still law
•CMS has softened some rules (value-based care exceptions)
•Enforcement remains real
•Compliance remains extremely complex

But philosophically, Stark is increasingly seen as:
•Outdated
•Misaligned with modern healthcare economics
•Asymmetric in who it restrains

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10. Bottom line

Stark Laws are not about corruption.
They are about control.

They were built on the assumption that:
•Physician ownership = danger
•Physician judgment = financially corruptible

Whether that assumption is fair — especially compared to insurers, hospitals, and private equity — is the real debate. 2/

True story: I had one if not the MOST successful bariatric, general, and acute care surgery practices in Connecticut 15 years ago. One day my accountant and lawyer walked in the room for a meeting in the lobby of my office which I owned along with part of a surgical center. They apologized to me and my practice members and said, “sorry but the powers that be have decided that doctors will no longer be paid”. “THEY will pay the hospitals but eventually NOT the doctors.” “THEY (powers that be) will let the hospitals figure it out.” Slowly, after a president’s law was passed our practice dwindled, decreasing year after year, despite every creative angle of legal income we created, after taking trauma overnight call at 3 different hospitals, firing half our employees, eliminating our marketing, working 80-120 hours a week, we eventually could no longer pay ourselves and we sold all, disbanded and every employee and surgeons went their separate ways. I separated from my brother after 20 years. We went to work for the hospitals because they got paid the money. The self- pay option was eliminated by insurance and all leverage to negotiate with them was gone. They have ALL the power and that is what they and Government wanted. NOW this is what the PEOPLE let happen. But the PEOPLE can complain to their politicians and the PEOPLE can vote. Don’t blame doctors, nurses, or healthcare workers, we are powerless. In reality your surgeon only gets $500 for a hernia repair but actually we get nothing because all payments go directly to the hospital or health system or large equity owned surgery practice.

The #Obesity epidemic has been first blamed on fatty foods. Many of us grew up learning that fat was bad. We ate low fat and sacrificed butter to eat inferior tasting margarine. 1/ The 1970’s and 1980’s pointed the finger toward fat as government health czars directed the blame away from #sugar and #carbohydrates. 2/

The Ozempic effect is a real phenomenon and will pressure state employee coverage and Medicaid which will increase state taxes but obesity prevention must be addressed as the epidemic is running rampant in the #US. 1/ medicalxpress.com/news/2024-01-o… The realization that there is an effective medical treatment for #obesity has instilled an infusion of hope in the American public and the world. Lives can now be transformed with the use of medication and NOT surgery alone. 2/

Having #obesity and its associated diseases is “Big Business” and GLP-1 agonists will effect profits

The “Ozempic effect” is coming for kidney drugs, heart-disease treatments, and more - these drugs may effect the production use and profits of other drugs- @Bloomberg @business 1/
The insanity of the public concern is that these medications could negatively effect the economy.

The reality is that these medications could reduce obesity rates and improve the health of people with 229 associated conditions. 2/

The word ‘#obese’ is now considered unacceptable by the world’s academic community and should be changed by the @WHO to #obesity - because: a person has a disease called obesity and that person is NOT the disease itself. @pattynece @Eggface @PaulDavidsonPhD @ConscienHealth

https://twitter.com/hutchleah/status/1609843258401886210

Unfortunately the word ‘obese’ is still used as a medical term but many journals are NOW dropping it and editing content to the NEW correct terminology when referring to people, which is “person with obesity” @Nature @NEJM

Banning Noncompete Clauses by the Federal Trade Commission would dramatically change the structure of medical health networks and greatly increase competition-It may destroy vulnerable medical systems who stand to lose physicians to higher paying neighbors ftc.gov/news-events/ne… #Noncompete clauses in contracts prevent employees from leaving a business, practice, or company and opening up their own establishment or joining a competitor in a location adjacent to their previous employer. They prevent competition locally. 2/

A very interesting thread on @Reddit with @Walgreens employees and others discussing the rules made by @LillyPad to only place through prescriptions with the diagnosis of #diabetes - #Mounjaro is NOT YET indicated by the @US_FDA for #obesity as a diagnosis

https://twitter.com/mcmartin_marty/status/1610331161494016003

The stigma for #obesity is directed at those with the disease. Unfortunately our society perceives that obesity is a “second class” disease and should be treated as such. Here @Walgreens employees are admitting to discriminating against patients 1/

I know it’s hard for you to believe but many insurance companies have purchased pharmacies:
1. @Aetna bought @CVSHealth
2. @Cigna bought @ExpressScripts
3. @UHC owns @OptumRx
1/

https://twitter.com/burnpitceo/status/1609602000802705408

Mergers of medical insurance companies and pharmacy chains is creating a #verticalintegration - many would consider this a monopoly nytimes.com/2018/10/10/hea… 2/

About 5 years ago I had 150 new people following me every day. My tweets were seen by many then one day it all stopped…. A website in Europe detected that I was #shadowbanned by @twitter 1/

https://twitter.com/NeilFlochMD/status/1601156185960456193

Clearly my tweets and retweets were not getting the same impact - I had gained notoriety from my social media presence and I had no answers. I had no recourse. No one at #twitter would respond to my texts, emails, or calls. So… I just worked harder… 2/

This is incredible on so many fronts:
1. Brendan Fraser BOLDLY took on the role@of #TheWhale
2. He is discussing the unfair treatment of people who need #obesity care
3. He is endorsed by @AdamSandler
We have broken New Ground

https://twitter.com/variety/status/1600198386400927745

I cannot remember a public figure advocating for the improvement of access to bariatric surgery so openly

Ten myths of weight and weightloss 1. Myth: Our current weight only depends on how much we eat and how much we exercise

Reality: Our weight depends on genetic, environmental factors and behavior as well as what and how much we eat, exercise accounts for little weight loss but can help maintain our weight

#Obesity is killing Americans
#Obesity increases risk for death from #covid #covid19
#Obesity is a disease
#Obesity is associated with over 200 other medical conditions
#Obesity is usually & eventually unhealthy
#Obesity & those with it should never be shamed or stigmatized #Obesity is mostly dictated by #genetics & environment
#Obesity is ignored by politicians
#Obesity occurs in 42% of Americans
#Obesity and people with it are ignored, shamed, humiliated, and discriminated against
#Obesity may occur after psychological trauma 2/

When the #ACA was implemented: there was no mandate established to ensure that #emr #ehr electronic medical records could communicate and physicians could obtain medical records from #doctors caring for the same patients at other offices or hospitals. 1/

https://twitter.com/reasobbob/status/1382859388831080448

What ensued was that the government forces practices to an incur most of the cost of buying expensive electronic medical records and forced them to use them or incur more financial penalties. In retrospect those who did not use #emr and #ehr benefitted 2/

There are many questions about the @moderna_tx #vaccine now being distributed in the #USA I am happy to answer them
(My qualifications: board certified general surgeon, associate editor @SOARD_JOURNAL, I can read research data and understand it, I don’t confuse fact & opinion) 1/

https://twitter.com/neilflochmd/status/1345060984751321094

Q: What doses of the @moderna_tx #vaccine are being given?

A: Two 100 microgram doses 4 weeks apart.

#vaccination #covid19 2/

How a #vaccine works: when we get #covid19 we make #antibodies and #Tcells. A #vaccine introduces #antigens: heat-killed, parts of #virus, #mrna that makes virus #spike into our bodies to produce the antibody and Tcells WITHOUT infecting us with #coronavirus & making us sick. 1/ When a new disease comes along like #COVID19 #coronavirus our body does not have #antibodies or #Tcells to fight it off. First we recognize it (the #antigen) and START to BUILD our defense or army to fight it back. #vaccines #vaccine (from who.int) 2/

As a physician, I find it shocking that patients with all diseases are not treated with the same respect and concern as one another. The truth is that someone with a cancer or heart condition has a respected medical disease and something with #obesity does NOT. 1/ The #US nation is now afflicted with #obesity. 42% of Americans suffer from this disease and while the news has covered many stories concerning these facts, the disease continue to rise in its frequency. Individuals continue the same habits that help contribute... 2/

After listening to a webinar from 5 Chinese #doctors in Wuhan, China who are in the middle of their outbreak - the following can be learned. 1/ Treatment: Much of the same medications and therapies are being used and developed worldwide with no dominant medication working the best. #Corticosteroids are being used, antivirals, #gammaglobulin, and #convalescentplasma 2/

This is a MUST SEE video on the #Coronavirus in Italy. The #ICU intensivist explains the epidemic and treatment- Report From The Front Lines @JAMA_current - YouTube #Covid_19 #COVIDー19 #COVID This is a good summary but somewhat inconsistent to what we have been hearing on #twitter about #italy. The question about triaging those sick and above 60 yo was NOT answered directly. He said the goal was for everyone to get an ICU bed but was that successful? 1/

This opinion article by Douglas Makinnon is both troubling and groundbreaking. First, no one should ever condone #fatshaming - as it has been proven to be detrimental to individual struggles with #obesity and does not lead to resolution. 1/

https://twitter.com/NeilFlochMD/status/1204118092554657792

The publication of this opinion, which “calls out” the #US government for a “waste of energy” during an #obesity crisis - #obesityepidemic is one of the few times a political publication has addressed the lack of action on resolution of this chronic diesease. @ObesityAction 2/

I have been a loyal #tweep now for over 5 years. I have obeyed, I have promoted, I have taught, I have listened I have helped those who misunderstood and tried to convince those who did not believe in #twitter. I believe and I want others to believe in its #freedomtotweet I have done my best as a #physician #surgeon and communicator to help other doctors learn the benefits of #twitter - I have talked at over 20 local, national and international meetings about the benefits of this incredible application #twitter - recruiting #doctors - #meded