Nagesh Jayaram, MD, has spent most of his 14-year oncology career outside the hospital system, which shapes his experience with broad compliance measures in a specific way.
Dr. Jayaram trained in internal medicine and hematology-oncology at Indiana University in Indianapolis before settling in eastern North Carolina, where he joined Goldsboro, N.C.-based Southeastern Medical Oncology Center. The single-specialty practice — one of a shrinking number of independent oncology groups left in the state — partnered with Nashville, Tenn.-based OneOncology about 1 1/2 years ago while keeping its own drug purchasing and business operations intact.
That independence, Dr. Jayaram said, has kept his practice largely outside the reach of Stark law, the federal statute that bars physicians from referring patients to entities with which they have a financial relationship.
“I think private practice has a little bit of an insulator from that, mainly because we’re not part of a big system,” Dr. Jayaram said.
The calculus changes for oncologists employed by hospital systems, he said. Because chemotherapy compensation is typically structured around production formulas, hospital contracts tend to cap how much a physician’s pay can rise even as productivity increases — a structure Dr. Jayaram believes is designed less around fairness than around avoiding scrutiny.
“I think Stark has made compensation somewhat a little bit less fair for oncologists, because you don’t really capture exactly what you’re doing,” he said. “I don’t think it’s fair for oncologists in terms of their compensation.”
Dr. Jayaram argued the law, enacted to prevent physicians from profiting from referrals for services they don’t personally perform, was written with a different kind of medicine in mind.
“I feel like more of the Stark stuff hasn’t really affected oncologists as much as surgeons, because it’s a lot easier to pay to play that way when you’re referring for surgical things,” he said.
Administering chemotherapy isn’t comparable to a primary care physician referring a patient out for surgery, he added.
“It’s my own treatment that I’m giving to a patient,” Dr. Jayaram said.
That distinction is part of why he isn’t especially worried about his own practice running afoul of the law, even as Stark law enforcement actions against hospital systems and larger oncology groups continue to make headlines.
For example, a New York hospital agreed last year to pay $6.8 million to settle allegations it improperly paid a Westchester, N.Y., oncology practice to induce referrals, and Indianapolis-based Community Health Network’s $480 million settlement remains the largest Stark law-related False Claims Act resolution in Justice Department history.
Reported violations, Dr. Jayaram said, tend to involve financial arrangements far more overt than the ones independent oncologists typically negotiate.
“I don’t think you’re gonna get caught up if you’re not doing something bad,” Dr. Jayaram said.
Still, he doesn’t expect Stark law to fade from the conversation as more independent oncology practices are absorbed into larger systems. The tension between physician compensation and referral law, in his view, will keep shaping how hospital systems pay oncologists going forward — even for physicians whose work looks less like a referral and more like the treatment itself.
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