Health Law Advisory: Federal Court Holds that It Lacks Jurisdiction to Hear Challenge to the New Definition of "Entity" Under the Stark Law Regulations

On April 20, 2009, the United States District Court for the District of Columbia issued an important ruling that will significantly affect the ability of physicians to challenge the Centers for Medicare & Medicaid (CMS) regulations under the federal physician self-referral law, more commonly referred to as the “Stark Law.” Last fall, a group of physicians and their physician-owned cardiac catheterization laboratories challenged CMS’s Stark Law revision of the regulatory definition of “entity” furnishing designated health services (“DHS Entity”).1 In brief, the Court held that it could not entertain the substance of the plaintiffs’ complaint because they had not exhausted their administrative remedies, even though the court found that plaintiffs could not directly bring an administrative challenge to the regulations’ revisions because they do not directly bill or receive payments from Medicare for designated health services (DHS). Instead, the Court held that the physicians must rely on their local hospitals, with which they contract but which are not parties to this lawsuit, to bring an administrative challenge on their behalf.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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