Philadelphia Health Care Lawyers: Stark Regulations and Requiring Referrals

The federal government passed regulations named after Congressman Pete Stark that aim to reduce the risk of conflict of interest when a physician refers a patient to another facility for additional care. Self-referral is the practice of referring a patient to a facility where the physician has a financial interest. The physician may be part owner or investor in the facility, or receive some kind of structured compensation for the referral. The Stark Law was intended to reduce the possibility of over-utilization of services, and to ensure other providers would be able to compete for services.

Exceptions to the Stark Law

What many providers do not know is that there are exceptions written into the Stark regulations. In many medically underserved areas physician investors are providing services that would otherwise not be available. The exceptions exist to accommodate legitimate business arrangements.  Actually, a hospital or employer may require a contracted physician to refer services to the hospital if those services relate to the physician’s services under the contract and other specific conditions are satisfied. The regulations state that a physician’s compensation or other arrangement for personal services may be conditioned on referrals to a particular provider as long as the arrangement for compensation meets the following conditions:

• The compensation arrangement must be set in advance for the term of the arrangement
• It must be consistent with fair market value for the services
• It must comply with an applicable exception under [42 CFR] §411.355 or §411.357

Additionally, the arrangement must meet two more conditions:

• The requirement to make referrals to a specified provider must be in writing and signed by both parties
• The referral requirement does not apply if the patient wants to see a different provider other than the one specified; the patient’s insurance requires them to see a specific provider; or the physician deems the required referral not to be in the patient’s best medical interest

Philadelphia Health Care Lawyers at Sidney L. Gold & Associates, P.C. Represent Medical Professionals

The experienced Philadelphia health care lawyers at Sidney L Gold & Associates, P.C. have provided quality legal counsel on Stark compliance in the health care field for over 35 years. If you have been charged with Stark Law violations we can help you with a personalized defense to achieve the best possible outcome for your case. Call us at 215-569-1999 to review your case, or complete our online form today.