State and Federal Restrictions on Physician Referral to Self or Other Health Care Entities (Stark Law)

Federal restrictions on physician self-referral prevent doctors from prescribing “designated health services” (DHS) that are payable by Medicare or Medicaid to an entity with which the physician has a financial relationship. These regulations are generally known as the Stark Law. The Centers for Medicare and Medicaid Services develop, publish, and enforce regulations relating to the Stark Law. Each state also has a variation of these regulations, which may or may not emulate federal law.

For example, if a physician owned a physical rehabilitation facility, that physician would not be permitted to refer patients to that facility unless an exception applied. The physical rehabilitation facility would not be permitted to bill for any patients referred by the connected physician. G2Z Law Group, PLLC recognizes that protection against fraud and abuse is critical to protect a health care provider from legal liability. Our firm is prepared to help health care professionals and businesses address issues presented by the Stark Law.

What does the Stark Law cover?

The Stark Law covers physicians, which include doctors of medicine or osteopathy, doctors of dental surgery or dental medicine, and doctors of podiatric medicine, optometry, and chiropractic medicine. It has three main elements:

1. The law prohibits a physician or immediate family member from referring DHS to an entity in which the doctor has a financial relationship. This relationship can be an investment, ownership, or arranged compensation, and the prohibition is applicable to services that are paid for by Medicare and Medicaid.

2. The law prohibits a health care professional or business from filing claims with Medicare or Medicaid for services designated as DHS.

3. The law establishes a list of specific exceptions and gives authority to the Secretary to create additional exceptions that do not create a risk of patient abuse.

Exceptions to the Stark Law are determined by a strict set of criteria. They include in-office ancillary services, hospital-wide services, and many others.

What services are included in the DHS designation?

The Office of Inspector General (OIG) has provided the following list of designated health services:

• clinical laboratory services;

• physical therapy services;

• occupational therapy services;

• outpatient speech-language pathology services;

• radiology and certain other imaging 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; and

• inpatient and outpatient hospital services.

What can G2Z Law Group do for my health care business?

As a strict liability statute, violations of the Stark Law can be difficult to overcome and result in large fines or expulsions from federal health care programs. With our firm’s help, however, many health care professionals and businesses have created effective programs to respond to the Stark Law, protecting them from litigation. By evaluating your business’s risks, our firm can do the same for you.

Our attorneys can represent you and your business in investigations for violations of the state or federal self referrals statutes.