Know when the Stark law applies to you

September 4, 2009

The Stark law is relevant only in situations that involve a specific set of health services and patients who use Medicare.

Key Points

To the contrary, the Stark law is relevant only in situations that involve a specific set of health services and patients who use Medicare.

To understand whether you've violated Stark, you first must know what the statute addresses. Not all Medicare problems are Stark issues. Stark applies only to financial relationships between physicians-and their immediate family members-and the entities to which they refer their Medicare patients.

That's it. Sleep studies, EKGs, NCVs, Holter monitoring-none of these issues are Stark-related.

If you or a family member refers a patient for the designated Medicare services to any entity with which there is a financial relationship, whether it is in the form of a cash payment or receiving something else of value in return, the referral may occur only if the financial relationship meets a long list of complicated exceptions to the prohibition on referring.

The exceptions cover relationships that are internal to a physician group, such as those involving office ancillary services or compensation formulas, as well as those that involve other parties-joint ventures in rural areas, financial relationships with hospitals, etc. Some of these exceptions are more complex than others.

To cite a simple example, in one case some physicians were concerned that their referral of Medicare patients to an imaging center that they co-owned would violate the statute. But as it turned out, the imaging center was located in what the government considers a rural area. Because of that designation, the doctors were allowed to refer Medicare patients to their center.

On the other hand, consider the case of some physicians who were offered the assistance-for free-of a hospital-employed nurse practitioner to help them make rounds at the hospital that they use for patient referrals. The doctors thought this sounded too good to be true, and they were right. They have to pay for the time the nurse practitioner works for them or it is a Stark violation.

To determine whether Stark laws will be an issue in any situation, ask yourself these three critical questions:

If the answer to any of these is "no," you do not have a Stark problem. You may have a potential false claims issue or anti-kickback statute violation, but without a "yes" to all three questions, you have not violated the Stark statute.

The author is the principal in Alice G. Gosfield and Associates in Philadelphia ( http://www.gosfield.com) and a Medical Economics Consultant. She can be reached at agosfield@gosfield.com
. Malpractice Consult deals with questions on common professional liability issues. Unfortunately, we cannot offer specific legal advice. If you have a general question or a topic you'd like to see covered here, please send it to memalp@advanstar.com
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Learn how referral to a diagnostic center could result in a Stark violation at http://memag.com/stark