Stark Law

Question 1

Elements of Stark Law

Answer 1

Doctors may not:

(1) Refer Medicare and Medicaid patients

(2) for specific services

(3) if the doctor or an immediate family member has a financial relationship with the entity providing the referred service

(4) unless an exception applies

Question 2

“Referral” definition:

Answer 2

A physician’s request for, ordering of, or certification of need for a designated healthcare service that is provided by someone else.

Services provided by the physician or the physician’s employees do not count.

Question 3

Designated Health Services

Answer 3

Stark Law applies only to Designated Health Services. DHS’s include:

1. Imaging
2. Laboratory testing
3. Hospital care
4. Physical therapy
5. Durable medical equipment

This may appear limiting, but it really does not limit the Stark Law’s reach that much.

Question 4

Stark Law only applies to referrals for services paid for by:

Answer 4

Medicare and Medicaid

Question 5

An entity is only financially related to a doctor if:

Answer 5

A doctor or a member of the doctor’s immediate family has either:

1. An ownership or investment interest in the entity, or
2. A compensation arrangement with the entity.

Question 6

Examples of Stark Law exceptions:

Answer 6

1. Bona fide employment relationships
2. Referrals to academic medical centers
3. Ancillary services provided in referring doctor’s office
4. Some preventative services
5. Non-monetary compensation <$300 annually
6. Space or equipment leasing

Many of the exceptions focus on whether the the financial arrangement reflects FAIR MARKET VALUE

Question 7

If a financial arrangement takes into account volume or value of referrals:

Answer 7

Then the arrangement likely violates Stark Law because it could provide bonuses for extra referrals/may encourage unnecessary referrals that Stark law is trying to prevent.

Question 8

Consequences of violations of Stark Law

Answer 8

Stark Law is civil law, so there is no prison time like the Anti-Kickback Statute. Penalties, however, include:

1. Repaying amounts billed within 8 months
2. $ penalties (Stark, treble, civil money penalty
3. False Claims Act penalties
4. Medicare exclusion

Question 9

To minimize risk of Stark violations, HCOs should do all of the following:

Answer 9

1. Create a database of employment contracts and ensure they meet Stark standards
2. Document all payments b/w parties
3. Provide employees with Stark Law training
4. Develop internal compliance policies