Stark Law [Healthcare Compliance Tips]

Review the Stark Law and examine your referral relationships with designated health entities.

In our previous tip, we discussed the importance of understanding the Anti-Kickback Statute (AKS), which is slightly like the Stark Law.

However, let’s dive in on what this law entails:

What is the Stark Law?

Under this law, it prohibits a physician from making a referral for certain designated health services payable by Medicare or Medicaid to an entity in which the physician or an immediate family member, has an ownership/investment interest or with which he or she has a compensation arrangement, unless an exception applies.

What is the difference between the Stark Law and Anti-Kickback Statute (AKS)?

• Difference #1: The Stark Law is a civil enforcement statute, unlike AKS.
• Difference #2: The Stark Law only applies to Medicare and Medicaid. AKS applies to all Federal health care programs.
• Difference #3: AKS requires that intent is proven. Whereas the Stark Law is considered a strict liability.
• Difference #4: The Stark Law referral relationship is between physician and the designated health entity, unlike AKS which applies to any referral source.

This chart created by CMS shares the differences between the two.

What are some examples?

• A physician refers a beneficiary for a designated health service to a clinic where the physician has an investment interest.

 What are the penalties?

• For physicians that violate this law, the civil monetary penalty is up to $24,478.00 for each service (as of 2018).
• Physicians must repay the claims and possible exclusion from participation in the Federal health care program.

What are the exceptions?

There are numerous exceptions to the Stark Law located on this page.  If you are uncertain on how to proceed with referrals or which exceptions apply, please contact your legal team or a consultant for guidance.

**The opinions and observations from the group/author are not a promise to exempt your practice from fines and penalties.  Research, modify, and tailor the advice to fit your specialty.