Marriage - A Trap?

The debate over North Carolina’s “marriage amendment” made me think of the many laws that punish people who choose to marry. Of course most people know about the equitable distribution and alimony threat. But there are other laws lurking in the shallow, muddy waters. North Carolina’s “Stark” law is one of the anti-marriage laws that can sneak up to bite health care providers. That state law takes its cue from the federal “Stark” law.

In 1989, a U.S. Inspector General Study reported that a physician was more likely to refer a patient for laboratory services when the doctor owned the laboratory. The government estimated that these “self-referrals” cost Medicaid and Medicare millions of dollars. To stomp out the waste, Congress passed legislation known as the Stark law. Stark applies to most health care providers. It prohibits providers from referring patients to a business in which the provider or a member of his immediate family has a financial interest. The federal Stark law applies only to certain services covered by Medicare or Medicaid.

Shortly after the federal law took effect, North Carolina enacted its version of Stark. The General Assembly intended to expand the federal law to address services covered by health insurance as well as those covered by Medicare and Medicaid. So, how does North Carolina’s law snare married people? Assume a family practitioner refers a patient to her husband, a cardiologist. Or, a general dentist’s patient needs a root canal. He refers the patient to his wife, an endodontist. In each case, our state’s Stark law may have been violated. Violations of Stark laws result in whopping penalties.

Assume our endodontist treats her husband’s patient and sends the patient a bill. She has just incurred a $20,000 penalty. If the government can prove that the married dentists had an “arrangement” to refer their patients to each other, a $75,000 penalty is also assessed. Malpractice insurance will not pay these penalties and they may not be deductible for income tax purposes.

 In addition to the financial repercussions, North Carolina’s law provides that those who violate Stark will face disciplinary action by their licensing boards. In our example above, the Dental Board can prosecute the dentist who made the referral as well as the endodontist who accepted the referred patient.

As well as violating the Stark law, the providers involved could face charges of a conflict of interest. Assume our endodontist examines her husband’s patient and finds that her husband has not addressed a lesion that could be cancerous. She refers the patient for a biopsy and the biopsy is positive for cancer. The delay caused by the general dentist’s negligence has worsened the patient’s outcome. Does the wife-endodontist inform the patient that her husband missed the lesion during his exam of the patient? If so, she may trigger a malpractice suit against her husband.

Assume the endodontist refers the patient to an oncologist but says nothing to the patient about the problems caused by her husband’s negligence. The patient begins treatment and the oncologist tells the patient that the lesion must have been present for a long time. He also tells the patient that if it had been checked earlier, the patient would have a better treatment outcome. Now the patient has reason to suspect that the endodontist withheld information in order to protect her husband.

Let’s go a step further in the “assumption” process. Assume our endodontist sees the lesion and, in order to protect her husband, she decides not to tell the patient about the lesion. A year or so later, she learns that her husband has been having an affair with his billing clerk. The endodontist is hurt and upset. To get even, she tells the patient about the lesion and says that her husband should have had the lesion biopsied. When it is finally checked, it is cancerous. The patient’s cancer doctor tells the patient that his cancer could have been easily treated if the dentists had noticed the lesion earlier. Now both dentists are “in the soup.”

Although the Stark law doesn’t give patients a right to sue doctors who violate its provisions, the patient may file suit against both dentists alleging malpractice and fraud. Health care providers who make referrals to their spouses should be alert to the dangers of the Stark laws. These laws are clearly a trap for the uninformed.