New York Governor Vetoes Legislation Intended to Conform State Self-Referral Ban to the Stark Law

New York State Governor Andrew Cuomo vetoed legislation that would have brought the State’s restrictions on physician self-referrals in line with the federal ban on self-referrals, which is commonly known as the Stark Law. Generally, the Stark Law prohibits physicians from referring Medicare patients for certain designated health services (e.g., clinical lab, imaging, among others) to an entity with which the physician (or a member of the physician’s immediate family) has a financial relationship, unless an exception applies.  The State Law by and large mimics the Stark Law, but there are certain distinctions that make the State Law more restrictive.  Notably, the State Law covers referrals of designated health services regardless of payment source, meaning remuneration from private insurers and managed care plans are covered by the statute. The Governor appears to have taken the position that a more restrictive statute, with greater safeguards against improper referrals, outweighs the functional benefits of consistency with its federal counterpart.