Stark Law Basics
The Stark Law was named after the bill’s promoter, U.S. Congressman Pete Stark. It’s defined under 42 U.S.C. § 1395nn and prohibits physicians from referring Medicare and Medicaid patients for other services from which they would financially benefit.
More specifically, a physician cannot make a referral to a patient for certain “designated health services” (DHS) to a provider “with which the physician or an immediate family member has a ‘financial relationship’”.
Defining “Referrals” and “Designated Health Services”
What constitutes a referral under physician self-referral laws is fairly broad. Referrals do not include procedures personally performed by the physician.
The Stark Law defines a referral as:
- requesting or certifying that a DHS is required;
- requesting consultation with another physician;
- requesting another physician perform tests/procedures; or
- requesting the provision of any DHS.
According to the Centers for Medicare and Medicaid Service, there are 12 items/services that are considered to be Designated Health Services, including:
- home 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;
- outpatient prescription drugs; and
- inpatient and outpatient hospital services.
Possible Defenses against Allegations of Healthcare Fraud Involving Stark Law Violations
The Stark Law does allow certain exceptions to the ban on physician referrals to account for legitimate business arrangements. There are actually 35 exceptions that allow a physician to make DHS referrals to Medicare/Medicaid patients. Some of them include:
- referrals within prepaid health plans;
- referrals to physicians in the same medical group; and
- personal service and lease agreements.
In many cases, an accused party will work with a defense attorney to prove that the physician’s relationship fell under one of the exceptions, and that his or her actions were within the bounds of the law.
The financial relationship of a physician to a referred party should be specified to the patient, generally. Similar to how celebrities need to announce when they have been paid to recommend a product. Both professions have an inherent level of trust in them on the part of the public and so usually need to draw attention to any paid advertising.
Penalties can be steep, i.e., up to $15,000 per violation. That’s why it’s important to begin working with a defense team as soon as possible if facing healthcare fraud allegations to start building a case in your defense, and negotiating for dismissal or reduced penalties.
Counsel from an Attorney in Fort Lauderdale
Contact the Law Offices of Robert David Malove. We are available for free consultations when you call (954) 861-0384 to speak with our team.