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A Brief Stark Law Analysis

The Stark Law is a statute governing physician self-referral for Medicare and Medicaid patients. Physician self-referral occurs when a physician refers a patient to a healthcare facility in which the physician has a financial interest.

Stark essentially prohibits a physician from making referrals for certain designated health services to an entity with which the physician, or an immediate family member of the physician, has a financial interest. There are certain exceptions to this general rule.

The designated health services contemplated by the law include, but are not limited to, physical therapy services, occupational therapy services, radiology and certain other imaging services, durable medical equipment and supplies, home health services, and inpatient and outpatient hospital services.

A Stark Law analysis can be reduced to four simple questions:

  1. Does the arrangement involve a referral of a Medicare of Medicaid patient by a physician or an immediate family member of the physician?

  2. Is the referral for a designated health service?

  3. Is there a financial relationship between the referring physician or family member and the entity receiving the referral?

  4. Does the arrangement fall within any exception?

It may also be wise to review advisory opinions issued by the Centers for Medicare and Medicaid Services (the "CMS") to determine whether the CMS has pronounced certain arrangements as violations of Stark.

Additional resources provided by the author

For more information on Stark, you can visit the CMS webpage on physician self referral at https://www.cms.gov/physicianselfreferral/

You can also view CMS advisory options at https://www.cms.gov/PhysicianSelfReferral/95_advisory_opinions.asp#TopOfPage

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