The Stark Law, or the Physician Self-Referral Law, is a federal civil law that prohibits physicians from referring patients to specific services in which the physician has a financial interest. This includes physical therapy services. The law was enacted to guide physicians to practice their profession with integrity and avoid unlawful self-referrals. It imposes limitations on financial and business transactions that physicians may engage in. The Stark Law applies to physicians who refer patients to Medicare or Medicaid and has serious repercussions for violations, including civil penalties and exclusion from federal healthcare programs.
Characteristics | Values |
---|---|
What is the Stark Law? | A set of regulations that prohibit the self-referral of physicians under federal law |
Who does the Stark Law apply to? | Medical doctors, osteopathy, optometry, dental medicine, dental surgery, podiatric medicine, and chiropractors. |
What does the Stark Law prohibit? | Physicians from making DHS referrals payable by Medicare to an entity that they or their immediate family members have a financial relationship with, like ownership, investment, or compensation. |
What are the consequences of violating the Stark Law? | Civil penalties of up to $15,000 for each service rendered in violation of the law, civil penalties of up to $100,000 for every circumvention scheme, three times the amount of the improper payment received from Medicare, refund of payments received by physicians and healthcare facilities, denial of DHS payments, and exclusion from Medicare, Medicaid, and other state healthcare programs. |
Are there any exceptions to the Stark Law? | Yes, including the Bona Fide Employment Exception, In-Office Ancillary Services Exception, and Whole Hospital Exception. |
Does the Stark Law apply to physical therapists? | Yes, physical therapy services are included in the Designated Health Services (DHS) covered by the Stark Law. |
What You'll Learn
- Physical therapy services are designated health services under Stark Law
- Stark Law prohibits self-referral for physicians with a financial interest
- Stark Law is a federal civil law, not a criminal statute
- Consequences of Stark Law violations can include financial penalties
- There are exceptions to Stark Law, such as the In-Office Ancillary Services Exception
Physical therapy services are designated health services under Stark Law
The Stark Law, or the Ethics in Patient Referrals Act, is a federal law that applies to programs such as Medicare, Medicaid, CHAMPUS, and other federal entitlement programs (FEPs). It prohibits physicians from referring patients for certain designated health services (DHS) to entities with which they have a financial relationship unless an exception applies. Physical therapy services fall under the category of DHS, which also includes clinical laboratory services, occupational therapy services, radiology services, and durable medical equipment, among others.
The inclusion of physical therapy services as a DHS under the Stark Law means that physical therapists must comply with the law's requirements when treating FEP beneficiaries. This is particularly relevant when physical therapists are part of a practice that provides services to FEP beneficiaries, as it may impact their compliance programs and increase the risk of Stark Law violations.
The Centers for Medicare and Medicaid Services (CMS) has provided specific codes, such as Current Procedure Terminology (CPT) and Health Care Common Procedure Coding System (HCPCS) codes, to define certain DHS, including physical therapy services. These codes help providers identify when they are providing treatment that falls under the Stark Law's purview.
The purpose of including physical therapy services as a DHS is to prevent conflicts of interest and ensure that all referrals are based on the best interests of the patients rather than any financial incentive. By designating physical therapy services as a DHS, the Stark Law promotes transparency and fair healthcare practices in the field of physical therapy.
It is important for physical therapists and their practices to be aware of the Stark Law's requirements and exceptions to ensure compliance and avoid potential violations, as the consequences can be significant, including civil monetary penalties, exclusion from federal healthcare programs, and damage to professional reputation.
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Stark Law prohibits self-referral for physicians with a financial interest
The Stark Law, named after US Congressman Pete Stark, is a set of federal laws that prohibit physician self-referral. Specifically, it prohibits physicians with a financial interest in an entity from referring patients to that entity for designated health services (DHS) covered by Medicare or Medicaid. The law is codified in the United States Code, Title 42, Section 1395nn, also known as the "Limitation on certain physician referrals".
The term "referral" under the Stark Law means "the request by a physician for the item or service" for Medicare Part B services. For all other services, it means "the request or establishment of a plan of care by a physician which includes the provision of the designated health service". DHS includes a range of services such as clinical laboratory services, physical therapy services, occupational therapy services, radiology services, durable medical equipment, and supplies, among others.
A "financial relationship" under the Stark Law includes ownership, investment interest, and compensation arrangements. The law prohibits physicians from making referrals for DHS payable by Medicare to an entity with which they or their immediate family members have a financial relationship, unless specific exceptions are met. These exceptions include physician services, in-office ancillary services, ownership in publicly traded securities and mutual funds, rental of office space and equipment, and bona fide employment relationships.
The Stark Law was first introduced in 1988 as the "Ethics in Patient Referrals Act" bill and became law as part of the Omnibus Budget Reconciliation Act of 1990. Initially, it prohibited physicians from referring Medicare patients to clinical laboratories in which they or their family members had a financial interest. Over time, the law was amended and expanded to include Medicaid patients and additional DHS beyond just clinical laboratory services.
The Centers for Medicare and Medicaid Services (CMS) have issued rules in the Federal Register to implement the Stark Law, and multiple federal entities, including the Department of Justice, CMS, and the Department of Health and Human Services, are responsible for its enforcement. Violations of the Stark Law can result in significant penalties, including denial of payment for DHS provided, refund of monies received, civil penalties, exclusion from Medicare and state healthcare programs, and more.
The Stark Law applies only to physicians and their immediate family members who are in a position to make referrals. It aims to prevent the referral of patients for DHS to entities in which the referring physician or their close relatives have a financial interest. This helps to avoid conflicts of interest and encourages competition among providers.
While the law specifically targets physicians, physical therapists can be impacted by its provisions. For example, if a physical therapist is part of a practice that includes physicians, the Stark Law would apply to the physicians in that practice and any referrals they make. Additionally, physical therapy services are included in the list of DHS covered by the law. Therefore, it is important for physical therapists, especially those working in interdisciplinary practices, to be aware of the Stark Law and ensure compliance to avoid legal consequences.
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Stark Law is a federal civil law, not a criminal statute
The Stark Law, or the Physician Self-Referral Law, is a federal civil law that prohibits physicians from referring patients to receive "designated health services" payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship. It is named after Rep. Fortney Hillman "Pete" Stark, Jr., who proposed the statute. The law's real name is the Ethics in Patient Referrals Act.
The law applies only to doctors and their immediate family members (if they are in a position to make referrals). For example, if a doctor of medicine or osteopathy, a doctor of dental surgery or dental medicine, a doctor of podiatric medicine, a doctor of optometry, or a chiropractor refers a Medicare patient to an entity providing designated health services (DHS) in which they have a financial interest, such a referral would violate the Stark Law.
The designated health services under the Stark Law include clinical laboratory services, physical therapy services, occupational therapy 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.
The Stark Law is a strict liability statute, which means that proof of specific intent to violate the law is not required. The law prohibits the submission or causing the submission of claims in violation of the law's restrictions on referrals. Penalties for physicians who violate the Stark Law include fines as well as exclusion from participation in federal healthcare programs.
While the Stark Law is a federal civil law, it is important to note that almost every state has its own laws against self-referrals, which can be considered mini-Stark laws. These state laws often track the federal Stark Law in whole or in part and may even include stricter regulations. Therefore, it is crucial for physical therapists and other healthcare providers to understand and comply with both federal and state regulations to avoid legal consequences.
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Consequences of Stark Law violations can include financial penalties
The Stark Law, or the Physician Self-Referral Law, is a federal law that was passed in 1989. It prohibits healthcare providers from referring patients on Medicare or Medicaid for "designated health services" to entities with which the provider has a financial relationship. This includes physician practice management companies. The law applies to all Medicare and Medicaid providers, including hospitals, physician clinics, nursing homes, laboratories, and other medical facilities. It also applies to individual physicians who refer Medicare or Medicaid patients for designated health services.
The Stark Law is complex, but its purpose is simple: to prevent the overutilisation of designated health services and kickbacks associated with referrals among healthcare providers. To violate the Stark Law, five basic elements must be present simultaneously. A physician must make a referral for the furnishing of designated health services payable by Medicare with which they or an immediate family member have a financial relationship.
To avoid Stark Law violations, healthcare organisations should conduct regular compliance assessments, educate and train staff, establish robust policies and procedures, seek legal guidance, and monitor and audit practices. By following these steps, medical organisations can enhance their compliance efforts and reduce the risk of Stark Law violations.
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There are exceptions to Stark Law, such as the In-Office Ancillary Services Exception
The Stark Law, or the Ethics in Patient Referrals Act, is a federal law that prohibits physicians from referring patients to services in which the physician has a financial interest. This includes services such as Medicare, Medicaid, and other federal entitlement programs. While the Stark Law does not apply to physical therapists directly, it does apply to physicians who refer patients to physical therapy services. This means that if a physician has a financial relationship with an entity providing physical therapy services, they are prohibited from referring Medicare or Medicaid patients to that entity.
The American Physical Therapy Association (APTA) has argued that the IOAS exception can hurt the development of alternative payment models (APMs) by failing to promote collaboration with small- and medium-sized physical therapy and non-physician practices. APTA has advocated for eliminating this exception to promote the growth of value-based care and increase physical therapists' meaningful participation in Medicare and Medicaid APMs.
It is important to note that the Stark Law and its exceptions only apply to federal programs. However, individual states may have their own laws and regulations regarding self-referrals, so it is essential to consult an attorney for specific legal advice.
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Frequently asked questions
The Stark Law, or the Physician Self-Referral Law, is a set of regulations that prohibit the self-referral of physicians under federal law. It was first enacted in 1992 and applies to federal programs such as Medicare and Medicaid.
The Stark Law prohibits physicians from making referrals for designated health services (DHS) payable by Medicare to an entity that they or their immediate family members have a financial relationship with, such as through ownership, investment, or compensation. It also prohibits the entity from presenting claims to Medicare or billing another entity or third-party payer for referred services.
There are serious repercussions for violating the Stark Law, including civil penalties of up to $15,000 for each service rendered in violation of the law, and up to $100,000 for every circumvention scheme. Other consequences include having to refund payments received, denial of DHS payments, and exclusion from Medicare, Medicaid, and other state healthcare programs.