The Ethics in Patient Referrals Act or Stark Law was passed in part in 1989. Since its passage, the law has been modified frequently, most notably in 2010 with the passage of the Affordable Care Act.
Intended to prevent physicians from inflating health care costs by improperly referring patients to treatment facilities where they hold a financial stake, the Stark Law has had the effect by driving up compliance costs. The law is civil, but a physician who is not careful could also face criminal charges related to anti-kickback statutes. Understandably, most physicians would like an easy explanation regarding how to know when they are responsible for Stark Law violations.
The Simplest Ways to Understand and Avoid Stark Law Violations
Most physicians already know that the Stark Law only applies to referrals of Medicaid and Medicare patients. Private insurance allows referrals to whatever facility the treating physician deems appropriate. The referrals may not be made by either the physician or an immediate family member. The law prohibits physicians from holding a financial stake in the facility to which the patient is referred.
If a physician refers a Medicaid or Medicare patient to a hospital, lab, physical therapy, radiologist, or similar services wherein the physician holds any kind of direct or indirect financial stake, the Stark Law generally applies. The key to knowing when the law applies is understanding certain key terms in the law. Two terms are of primary importance.
The first is fair market value. The Ethics in Patient Referrals Act provides 20 exceptions which require that any referral services meet the general value in the market. One of the key exceptions to the Stark Act is being part of a physician group and key to this arrangement is fair market value of services.
The second element of importance is whether the referral is to a designated health service (DHS) as defined in the statute. If the referral is to a service not included in that designation, it is not a Stark Law violation. The Centers for Medicare & Medicaid Services provides a DHS code list to help physicians avoid missteps in this part of the law. Of course, the best way to avoid a Stark Law violation is to consult regularly with a knowledgeable health care lawyer.
Philadelphia Health Care Lawyers at Sidney L. Gold & Associates P.C. Help Physicians Ensure Stark Law Compliance
Whether you seek to prevent a violation or have been accused of breaking the Stark Law, the Philadelphia health care lawyers at Sidney L. Gold & Associates P.C. can help. We stay on top of changes to the law and successfully help our clients avoid legal troubles. We also help physicians already in trouble avoid crushing liabilities and criminal convictions. We serve clients throughout Pennsylvania, New Jersey, and New York including those Bucks County, Chester County, Delaware County, Montgomery County, and South Jersey. Contact us online or call now 215-569-1999 to arrange a confidential consultation.