Physicians are mainly prevented from referring patients to entities in which they will reap financial incentives or gains from Medicare patients. Cons of the Stark Law: Despite of its several advantages, the Stark Law also has some disadvantages that basically emanate from its application including & #8230; Contributing to over-utilization of Services: The legislation leads to over-utilization of services since there is a likelihood of referrals that are not clinically necessary, increasing healthcare costs, restricting competition among providers, and placing the health of patients at risk ("Anti-Kickback, Stark," p
The idea for the laws came into place because of the practice of physician self-referral, or the practice of a doctor referring a patient to a medical organization in which they had some sort of financial interest. Critics of this practice believed that there was an inherent conflict of interest, not to mention a fiscal benefit to the physician, which might encourage over testing, use of procedures that might be more expensive than the market could bear, and/or because of the captive audience (the patient) provide undue pressure to use only those physician recommended providers and services (Law 2011)