PRACTICE RESOURCES > Regulation/AUA Positions, Letters, and Talking Points > OMB Regarding Stark II Final Rule

OMB Regarding Stark II Final Rule

November 15, 2000

Jacob J. Lew
Office of Management and Budget
Eisenhower Executive Office Building
17th Street & Pennsylvania Avenue, NW
Washington, DC 20503

Re: RIN: 0938-AG80; HCFA-1809-FC—Medicare and Medicaid Programs; Physicians' Referrals to Health Care Entities With Which They Have Financial Relationships.

Dear Mr. Lew:

On behalf of the American Urological Association (AUA), representing 9,200 urologists in the United States, I write regarding the above-mentioned final rule, currently under review by the Office of Management and Budget (OMB). Certain provisions of this rule relate to urologists' provision of extracorporeal shock wave lithotripsy (ESWL) to their Medicare patients for the treatment of kidney stones. Therefore, this rule could have devastating impacts on kidney stone treatment for Medicare beneficiaries if ESWL is not granted an exception under the statute.

The Health Care Financing Administration's (HCFA) proposed rule on this subject stated, "While we agree that it might be unlikely that physicians would overutilize ESWL, we believe that these arrangements can potentially lead to patient abuse, with physicians requiring the use of certain equipment based on financial incentives, rather than on the best interests of the patient." The AUA subsequently submitted comments to HCFA and has also met with HCFA staff on numerous occasions to explain why ESWL does not pose a threat for overutilization. We would like to explain to you why it is vital that an exception for ESWL be included in the final rule.

ESWL is a non-invasive procedure that uses shock waves to fragment ureteral and kidney stones. At the time of its introduction to the United States in 1984, it offered a welcome alternative to invasive surgery, which was the traditional method for removing kidney stones. ESWL offers advantages over traditional open surgery of reduced pain and suffering for patients, a rehabilitation time of only one to two days and reduced risk and expense. In fact, former HCFA Administrator Gail Wilensky noted in 1991 that lithotripsy was one of the few instances in which a new medical technology decreased rather than increased health care costs.

Because many hospitals did not have the financial resources required to purchase lithotriptors, urologists often pooled their own resources to finance the substantial capital costs required to obtain and operate a lithotriptor. Physician ownership of independent lithotriptors is still common today, and the procedure is usually performed on an outpatient basis in either fixed-site or mobile-unit facilities serving hospitals. Because lithotripsy services for Medicare beneficiaries are usually billed through a hospital outpatient department, ESWL is considered by HCFA to be an "outpatient hospital service," causing it to fall into the realm of prohibited services under Stark II. Therefore, ESWL is arbitrarily covered by the Stark II law simply because of the Medicare billing arrangement that HCFA originally recommended.

If ESWL is not granted an exception, patients will be forced to travel long distances to find treatment. This will almost certainly lead to disruptions in patient access by forcing patients to travel to another lithotriptor not owned by the treating physician. In some areas, since there are no lithotriptors not owned by urologists, patients would potentially have to leave the state to receive treatment. For example, in Oklahoma, the only non-physician owned lithotriptor is in Tulsa, and there is also a physician-owned lithotriptor in Tulsa. All lithotriptors in Oklahoma City, including mobile lithotriptors, are physician owned as well.

Therefore, if Stark II prohibits Medicare and Medicaid patients from being treated on physician-owned machines, patients in northern, western and southern Oklahoma would not have access to this technology unless they traveled hundreds of miles to the one non-physician owned facility in Tulsa or out of state to Kansas or Texas. For most patients this is not a practical option. Furthermore, many of the ESWL units in other states are physician owned as well. This is particularly unfair to the elderly population and it interferes with the continuity of care that usually accompanies lithotripsy treatment, since the practicing physician is responsible for all aspects of treatment, including pre-treatment diagnosis, the treatment itself, and post-treatment care.

Additionally, some non-urologist owned facilities could become flooded with Medicare and Medicaid patients, leading to delays in service for patients waiting in pain. This could create a two-tiered health care system, with non-Medicare patients having the same access and convenience as before while Medicare patients suffer because of the ban. Also, because capitated arrangements are excepted under Stark II, Medicare fee-for-service patients will be affected more than those in managed care.

Even Rep. Pete Stark, primary author of the laws, has indicated during debate on the House floor (see attachment 1: 103rd Cong., 1st sess. Congressional Record 139 (5 August 1993): H6238) and in written communications to HCFA (see attachment 2) that Congress did not intend for lithotripsy to be covered by the self-referral law.

Furthermore, the nature of kidney stones and the clear guidelines for their management preclude the possibility of referrals to lithotriptors purely for economic incentive. It is important to note that lithotripsy is a therapeutic procedure, not a diagnostic one, meaning that a stone must be previously identified for a patient to undergo the procedure. HCFA even states that "the procedure itself apparently documents the medical necessity to prescribe it. As we understand ESWL, the kidney stone is located, identified, and the progress of the therapy is recorded as part of the visualization process."

The AUA's Nephrolithiasis Clinical Guidelines Panel has published guidelines on The Management of Staghorn Calculi and The Management of Ureteral Stones. These are clearly defined guidelines for physicians to follow in the treatment of ureteral and kidney stones-after a stone has been diagnosed-based on the size and location of a stone and clinical status of the patient. In addition to such formal protocols for the appropriate management of stone disease, all accredited lithotripsy facilities have thorough utilization review and quality assurance programs in place to monitor physician treatments for appropriateness. Many facilities incorporate physician and staff review of each case prior to treatment to confirm its appropriateness and likely clinical efficacy.

Thank you for considering our concerns. If you have any questions or need additional information, please contact Robin Hudson, Manager of Regulatory Affairs, at 410-689-3762 or


Irwin N. Frank, MD, F.A.C.S.
American Urological Association

cc: Jeanne Lambrew, Associate Director of Health and Personnel, OMB
John Spotila, Administrator, Office of Information and Regulatory Affairs, OMB


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