The Stark Law
The Stark Statute, 42 U.S.C. § 1395nn, prohibits a physician from referring Medicare patients for specific services ("designated health services" or DHS) to entities with which they (or an immediate family member) have a "financial relationship." Originally enacted in 1989, Stark I, only applied to physicians referrals for clinical laboratories. In 1993, Congress extensively revised the Stark Law, expanding the referral and billing prohibitions to cover additional types of designated health services. This legislation is also known as Stark II.
Stark Law Ban on Physician Self-ReferralThe Stark Law generally prohibits a physician from making a referral for the furnishing of designated health services ("DHS"), for which payment may be made under the Medicare program, to an entity with which the physician or an immediate family member has a financial relationship. If a financial relationship exists, the physician is precluded from referring patients to the entity for DHS, and the entity is precluded from making a claim for payment under the Medicare program for any such referred DHS unless the arrangement falls within an exception.
Penalties for Violating the Stark LawA physician or billing entity that is found to be in violation of the Stark Law can be subject to a civil monetary payment of $15,000 for each service, a $100,000 civil monetary penalty for each arrangement considered to be a circumvention scheme and exclusion from participation in federal health care programs. In addition to being subject to a civil monetary penalty for violating Stark Laws, a physician or billing entity may be subject to a civil suit under the False Claims Act. Where a provider submits a claim for services that were furnished pursuant to a referral that violated the Stark Law, the submission may constitute a "false claim" for purpose of the False Claims Act.
Physician Defined Under The Stark LawA physician is defined under the Stark Law as a doctor of medicine or osteopathy, a doctor of dental surgery or dental medicine, a doctor of podiatric medicine, a doctor of optometry, or a chiropractor.
Designated Heath Services Under The Stark Law- Clinical laboratory services;
- Physical therapy services;
- Occupational therapy and speech-language pathology services;
- Radiology services, including MRI, CAT scans, and ultrasound 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 hospitalization services, and
- Nuclear medicine will be considered a DHS beginning in 2007.
- All space and equipment leases;
- Marketing agreements;
- Below fair market value agreement between providers and suppliers;
- Hospital, Nursing home and other facilities cost report certifications;
- Wavier of co-payments and deductibles;
- A drug companies failure to report the their best price for drugs to federal payors;
- All Physician employment and independent contractor arrangements;
- Office sharing agreements and time-sharing arrangements.
If you have knowledge of a physician or billing entity that has violated the Stark Law, call the attorneys of Belt Law Firm at 888-933-1514 for a free confidential consultation.