Stark Laws

From HMCwiki

Stark Laws, found in Section 1877 of the Social Security Act, ordain it illegal for physicians to refer patients in the Medicare and Medicaid program to a certain "designated health service" in which the physician or an immediate family member has a "financial relationship."

Designated health services under the stark law

1. clinical laboratory services

2. physical therapy, occupational therapy, and speech language pathology services

3. radiology and certain other imaging services

4. radiation therapy services and supplies

5. durable medical equipment and supplies

6. parenteral and enteral nutrients, equipment, and supplies

7. prosthetics, orthotics, and prosthetic devices and supplies

8. home health services

9. outpatient prescription drugs

10. inpatient and outpatient hospital services

11. nuclear medicine

Determining a "financial relationship"

There are two types of financial relationships under the Stark Law. The firist results from either a direct or indirect "ownership or investment interest" in the entity that provides the designated health service; the second is a compensation arrangement between the entity that provides the designated health service and the physician.

A referral under the Stark Law is considered in a much wider perspective than the normally defined patient-physician relationship. A referral includes a physician's request for, ordering of, or certifying or recertifying the need for any "designated health service that is reimbursable under Medicare Part B, including a request for a consultation with another physician and any test or procedure ordered by or to be performed by that other physician.

Stark law exceptions

These laws contain about 35 exceptions that are considered legitimate. Some commonly accepted exceptions include a) in-office ancillary services, b) bona fide employment relationship, c)physician recruitment, and d) physician practicing in rural areas and locations labeled as Health Professional Shortage Areas. All exceptions apply to limited situations and circumstances. Physicians should consult with a lawyer to understand completely which actions can or cannot be prosecuted.

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