Get Primed on Stark Law

By Mary Pat Whaley, CPC, FACMPE

In health care, we are “blessed” with an abundance of rules, policies, standards, and laws. Three important regulations are the False Claims Act, Stark Law, and Anti-Kickback Statute, which you should not only know about, but should be actively managing via a robust compliance plan.

To help keep your practice out of harm’s way in regards to the Stark Law, here are some things you should know:

Stark Law (Physician Self-Referral)

When: Section 1877 of the Social Security Act, also known as the physician referral law, is commonly referred to as the Stark Law. When enacted in 1989, it applied only to physician referrals for clinical laboratory services. In 1993 and 1994, Congress expanded the prohibition to the additional designated health services listed below.

What: Stark Law “prohibits physicians from making referrals for designated health services (DHS) payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership, investment, or compensation), unless an exception applies,” according to the Centers for Medicare & Medicaid Services (CMS). Specifically, covered DHS include:

  • Clinical laboratory services
  • Physical therapy services
  • Occupational therapy services
  • Outpatient speech-language pathology services
  • Radiology and certain other imaging services
  • Radiation therapy services and supplies
  • Durable medical equipment (DME) 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

Penalties: Penalties for violating the Stark Law include denial of payment, refund of payment, imposition of a $15,000 per service civil monetary penalty, and imposition of a $100,000 civil monetary penalty for each arrangement considered to be a circumvention scheme.

Be Compliant: To help you stay in complaince with the Stark Law:

1. Offer all patients a written list of choices for obtaining the care your physicians are recommending.

2. Disclose any financial relationship with any entity that is on the list offered to patients.

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3 Responses to “Get Primed on Stark Law”

  1. Matthew A. Evans, MA, CPCO says:

    There is a great article: Compliance Is Not a 4-letter Word by David Lane, PHD, CHC, CPC, CAPPM in the Coding Edge-November 2012. It includes information on the Stark Law, False Claims Act, Anti-kickback Statue, and HIPAA, which all of my fellow CPCO’s know out there per our study guide was the first of a succession of provisions passed by congress to fight health care fraud.

  2. Julie Chicoine, Esq., RN, CPC, CPCO says:

    The Physician Self-Referral (“Stark”) law can be complicated. I authored an article that was published in the AAPC Coding Edge, March 2012 titled “Physician Self Referrals and Compliance: What You Should Know,” which provides an overview of key Stark principles and requirements.

  3. Jill D. Duncan says:

    Julie,

    Thank you for the “compressed need-to-know” version!

    Jill Duncan, MSM, CPC-A

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