The War of the Medical Worlds: Government Versus Private Practice in Invasive Cardiology

Adele Serio, RN, RCIS, Clinical Director, Colorado Heart Institute, Aurora, Colorado; Scott Serio, RCIS, Staff Tech, Platte Valley Medical Center, Brighton, Colorado
Adele Serio, RN, RCIS, Clinical Director, Colorado Heart Institute, Aurora, Colorado; Scott Serio, RCIS, Staff Tech, Platte Valley Medical Center, Brighton, Colorado

Our History Transitioning From Private Labs to Hospitals

Adele Serio, RN, RCIS, has been employed at Colorado Heart Institute (CHI) for 20 years. CHI originally opened its doors in 1987, built by a group of entrepreneurs who could envision how the then-small city of Aurora, Colorado would grow. At that time, the city was host to a small community hospital, which did not consider a cath lab necessary. But, due to this visionary group, a one-room cath lab was built, and grew over 23 years to become a Center of Excellence in cardiac care in the area. CHI now has three cath lab suites and a holding area that also performs procedures. Complex electrophysiology procedures, such as atrial fibrillation ablations, are also performed. The facility does close to 3,000 procedures annually. All cath lab services are provided for The Medical Center of Aurora (TMCA), which has contracted with CHI to provide 24-hour/7-day a week coverage for all myocardial infarctions. Precipitated by the U.S. government’s August 2009 Final Rule, on October 1, 2009, TMCA purchased all of the capital equipment owned by CHI. On January 1, 2011, CHI employees became employed by TMCA, as the physicians sold the shares in their company. Adele has chosen to remain the clinical director of the cath lab after its transition. Scott Serio, RCIS, was employed by CHI in 2000, but moved to a privately-owned satellite facility of CHI at the Platte Valley Medical Center campus in Brighton, Colorado, in 2007. The Platte Valley Facility had just completed state-of-the-art construction. However, the patient base was not established at that time. Brighton, Colorado is a small farming community, much like Aurora, Colorado, was 20 years ago. By December 2008, it was determined that Platte Valley Medical Center would retain ownership of the cath lab. All equipment became the property of the hospital and the employees were offered positions. Scott maintained his position as a RCIS in the cath lab where he also proctors new employees and cardiovascular nurses on the telemetry floors. After having lived through cath lab transitions, we offer the following suggestions to staff and managers to assist with coping during the ownership conversion of a cath lab. Staff members adapt in a variety of ways. This article will equip you with vital knowledge to make it through the process successfully.

Where Did It All Come From?

The Stark Laws

Remember the days when physicians made house calls, took x-rays in their offices and examined blood specimens under a microscope? Those days are gone. Over the last twenty years, the Stark Laws have slowly eroded privatized medicine, not only in offices, but also in cath labs. For those working in private cath labs, each Stark Law has removed more independence from the lab as it has been enacted, until finally, many private labs will close by the end of 2010 (some have already closed). Let’s examine some history to see its impact on the future. Fortney Hillman “Pete” Stark has been a Democratic Congressman for the 13th congressional district of California in Alameda County since 1973. He is the 6th most senior Representative and the 8th most senior member of Congress. He initiated the work in Congress behind the Stark Laws. He is a strong advocate of universal health care. He is a senior member of the powerful Ways and Means Committee, one of the most powerful Committees on the Hill. He currently serves as the Chairman of its Health Subcommittee. He graduated from Massachusetts Institute of Technology (MIT) in engineering and the University of California, Berkeley, with a Master’s degree in Business Administration (MBA). In 1989, his law, Stark 1, only prohibited self-referrals for clinical laboratories. In 1995, Health and Human Services implemented this law. In 1993, passage of Stark II broadened the Stark Law’s scope to include self-referrals with a financial interest (private ownership) and included an array of what is called “designated health services” (DHS). Designated health services become important to cath lab personnel because they include these ten items:
  • Radiology and certain other imaging services
  • Clinical laboratories
  • Physical therapy, occupational therapy and speech language pathology services
  • Radiation therapy services and supplies
  • Durable medical equipment and supplies
  • Parenteral and enteral nutrients, equipment and supplies
  • Prosthetics, orthotics and prosthetic devices and supplies
  • Home health services
  • Outpatient prescription drugs
  • Inpatient and outpatient hospital services
The regulations for Stark II were executed in phases, beginning in January 1998, with final implementation in January 2001. The August 2009 Final Rule brought the most current modification to the private cath labs in the country. Effective October 1, 2009, this law incorporated the following alterations:
  • It prohibited a certain type of “under arrangement” contract between hospitals and physician joint ventures;
  • It prohibited per click/per unit payments on space and equipment;
  • It prohibited transactions that were based on percentage for space and equipment.
One might wonder why there are still privately owned cath labs operating. They can do so, if they are working within the limitations of the Stark Laws. Some facilities have been able to find these exceptions, or work together within the boundaries of the laws. There are a number of exclusions and minute details in these laws that continue to be argued by attorneys. The Centers for Medicare and Medicaid Services regulate the Stark Laws and advisory opinions with other government agencies, such as the Office of Inspector General and the US Department of Justice, enforcing fines, if necessary. Stark Laws only apply to Medicare/Medicaid patients.

How Private Labs are Affected (and Our Experience)

The Stark Laws have individually affected many cath lab personnel, who have, regrettably, become innocent victims as their jobs have been swallowed up in government bureaucracy when hospitals have legally overtaken private practices. Employees used to have security in the ownership of their companies. Now many physicians have been forced to fight for control to maintain their property and staff. However, many have lost. The employees have become bewildered as their employer is left with little power to preserve an intact company. They watch it become consumed by the larger corporate environment, the hospital. Most people who work for hospitals are completely satisfied with their employment. They applied for their job by choice. The problem with the type of transition mentioned above is that it is not expected, intended, or designed by both parties with complete equity. The staff is caught in the middle of two corporations (the physicians and the hospital) trying to hammer out the best deal. Through the physicians’ loss, the employees are left with the decision to find alternative work, or accept what is offered through the hospital negotiations. Negotiations have resulted in some staff loss of wages, loss of tenure for paid time off, loss of tenure for 401K, decreases in % of pension plans, starting over with insurance, and the list goes on. They are under a new employer, so they are treated as new staff, even if they have worked with the facility for 20 years. As the transition occurs, the staff may experience the five stages of grief described by Elisabeth Kübler-Ross: denial, anger, bargaining, depression and then, hopefully, acceptance. Like a roller coaster, each day, the emotions are raging. It takes months for most to overcome until they reach resolution. As every team member is working through their emotions on a different level, one can only envision what torment the department is undergoing every day. In a private lab, employees have had the opportunity to celebrate the best. The physicians have the occasion to bypass the hospital channels that can restrain progress. They are able to make choices for new products in a timely fashion without having to wait for hospital capital expenditures, can provide competitive salaries to retain the best staff in the city, offer access to multiple product lines to offer variety and success in procedures, and substantial rewards for production and cost-cutting measures. These facilities have a shorter chain of command, so the staff feels closer to the top management. This lends itself to a feeling of family and helps them feel less of a “number.” This environment of accomplishment leads the staff toward:
  • Autonomy
  • Distinguished facility reputation
  • Pride in their work
  • Heightened physician relationships
  • Sense of entitlement
  • Quality unsurpassed
  • Substantial bonuses

What’s a Manager to Do? Insecurity During a Transition

During a transition, staff fears the unknown. They believe they will become lost in the masses of the corporate environment. The personal relationship they have had with their physicians is jeopardized. No one can tell them initially if their wages will be cut. There is a dread of job loss. Working in this corporate environment, where productivity is the bottom line, they sense they will be sent home when the census is low and as a result, will be unable to meet their bills. The unanswered question of floating to other floors looms in their minds. Some apprehensions are irrational, while some are well founded. Regardless of how unreasonable their fears are, thoughts of anxiety and uncertainty well up inside everyone to create a very restless, agitated staff. Until all these questions are answered, there is not much a manager can do except offer moral support. When the staff is in the midst of this turmoil, no words can pacify them. It is kind to say, “It will be alright,” but no one knows what the future holds. All everyone can do is hold on together and believe in the best outcome. Try to console to one another, as everyone is riding this wave in concert. Individually, attempt to get out of bed on the right side, so as not to be a bear every day. There will be times that emotions get the best of the team, but don’t hold a grudge. The team is hurting. Give some allowance for this. Staff support is the overriding principle. Loss of security has occurred. Their anxieties are real. As a leader, find outlets for them to find positive, adaptive coping mechanisms, or, without direction, there will be negative outcomes. Be thick-skinned. People are going to be extremely emotional and say things in a passive aggressive manner. They may emotionally project and act out in ways that are very spiteful. Have frequent staff meetings to allow for venting, questions and squelching of rumors. Invite the administration from the new business to a meet-and-greet, so employees can ask questions and break the ice. As the director, work with the corporation as their advocate to maintain staff wages and keep benefits intact; try to grandfather their tenure for paid time off and 401k vesting. Sit in on their employee interviews, if they so desire. Keep your medical director heavily involved as well. He or she can be an invaluable asset. Some facilities have employee assistance groups that can offer personal counseling. As a manager, be available. Be a listener. Attrition may occur. Be prepared and have a list of prospective employees for hire.

Turn Your Hardship into Success

At this point, we do believe it is important to emphasize, that at both Colorado Heart Institute (CHI) at Platte Valley Medical Center, in 2008, and at CHI in Aurora, January, 2011, ALL the staff moved with Scott and Adele to their respective facilities. No one left due to the transition. Though this was tremendously emotionally difficult for every team member, they realized that the hospital setting was not “the enemy.” The process they underwent was what was so destructive. All of these people work in healthcare by choice. Many had worked in hospitals before. They love caring for patients. These same patients originate in the hospital. The transition was hard because leaving their employer was not a choice made by a group of adults living in a free culture. To eliminate the decision to be employed by one’s job due to a law, or contract, is hard medicine to swallow, whether one is in the medical or corporate world. Platte Valley Medical Center and The Medical Center of Aurora provided good examples of trying to work with the employees to help them through a complex process. On another level, it became as hard for them as it was for the employees. They had to manage these broken people, attempting to help them heal while integrating them into their systems. This may be one of the most difficult tasks that can be taken on by a cath lab, the manager and team. The team may look different after the hospital corporation takes over, but it still remains the team. Usually, the physicians are still working with the employees, just not employing them. The director’s attitude will influence that of the cath lab, so there is no luxury to let your guard down and become dismayed. Press forward and help the team stay strong in their new environment. Do not let the Stark Laws cause the demise of your cath lab. Remember what mathematician James Yorke said, “The most successful people are those who are good at plan B.” Choose to succeed!

Adele Serio can be contacted at
Scott Serio can be contacted at


  1. Coping Mechanisms. Available at Accessed January 20, 2011.
  2. Kübler-Ross model. Available atϋbler-Ross_model. Accessed January 20, 2011.
  3. Gordon JH. Government Resources: Summary of Key Aspects of the Final Stark II Rule. HHS issues final rule prohibiting physician self-referrals. AIS Compliance: A Channel on Available online at Accessed January 20, 2011.
  4. American Health Care Association. Physician Self-Referral (Stark Law). Available online at http://www.ahcancal .org/facility_operations/ComplianceProgram/Pages/PhysicianSelf-ReferralStarkLaw .aspx. Accessed January 20, 2011.
  5. Stark Law. Information on penalties, legal practices, latest news and advice. Available online at Accessed January 20, 2011.
  6. Gosfield AG. The Stark Truth About the Stark Law: Part I. Fam Pract Manag 2003 Nov-Dec;10(10):27-33. Available online at Accessed February 17, 2011
  7. The online office of Congressman Pete Stark. Representing California’s 13th District. Available online at Accessed January 20, 2011.