Stark Law And Physician Assistants: What's The Verdict?

The Stark Law, also known as the Physician Self-Referral Law, prohibits physicians from referring patients to certain facilities for designated health services (DHS) if they have a financial connection to that facility. This law applies only to physicians, and not to nurse practitioners or other advanced practice nurses. However, a recent proposal from the Centers for Medicare and Medicaid Services (CMS) includes an exception that covers remuneration paid to practice groups for employing nurse practitioners or physician assistants. While the Stark Law does not directly apply to non-physicians, it is important to note that it does apply to immediate family members of physicians.

Physician assistants and the Stark Law

The Stark Law, or Stark Act, also known as the Physician Self-Referral Law, is a set of regulations in the United States that prohibit physicians from referring Medicare or Medicaid patients to receive Designated Health Services (DHS) if the physician has a financial connection to the facility. This includes ownership, investment, or any compensation agreement with the facility. The law is designed to prevent fraud and abuse in healthcare by ensuring that referrals are based on the needs of the patient rather than the physician's financial gain.

While the Stark Law only applies to physicians, it is important to note that it also covers immediate family members of physicians. This means that a physician's spouse, parent, child, sibling, or other close relative would be subject to the same restrictions as the physician themselves.

In recent years, there have been proposals and changes to the Stark Law that impact non-physician practitioners, including physician assistants. For example, as of January 1, 2016, a new exception allows hospitals to provide subsidies to physician practices for the recruitment of non-physician practitioners (NPPs), which includes physician assistants. This exception was created in response to predicted shortages of primary care practitioners and an increased demand for NPPs due to healthcare initiatives and an aging population.

Additionally, in a recent proposed rule, the Centers for Medicare and Medicaid Services (CMS) included an exception that covers remuneration paid to practice groups for the purpose of employing nurse practitioners or physician assistants. This indicates an acknowledgment that while the Stark Law does not directly apply to non-physicians, there may be indirect implications for them under certain circumstances.

It is worth noting that the Stark Law is distinct from the Anti-Kickback Statute, which has a broader scope and applies to anyone engaging in business with a federal healthcare program. Unlike the Stark Law, the Anti-Kickback Statute requires specific intent to violate the law, whereas the Stark Law is a strict liability statute, meaning that simply being aware of or having reason to know about a violation can result in penalties.

In summary, while the Stark Law does not directly apply to physician assistants, they may still be impacted by its regulations and exceptions, particularly when it comes to their employment and recruitment. It is important for physician assistants to be aware of the Stark Law and how it interacts with their role in the healthcare team.

Physician assistants and NPP subsidies

The Stark Law, or the Physician Self-Referral Law, is a set of regulations in the United States that prohibit physicians from referring Medicare or Medicaid patients to receive Designated Health Services (DHS) if the physician has a financial connection to the facility. The law was established to prevent fraud and abuse in healthcare, ensuring that referrals are based on the needs of the patient rather than the physician's financial gain. While the Stark Law only applies to physicians, it is important to note that it also covers immediate family members of physicians.

In the context of NPP subsidies, there is an exception to the Stark Law that permits hospitals to financially support private practice physicians in recruiting and employing non-physician practitioners (NPPs) in high-need fields. This includes physician assistants (PAs), nurse practitioners (NPs), certified nurse-midwives, clinical social workers, and psychologists. The regulation allows hospitals to contribute up to 50% of NPP compensation, including salary, signing bonuses, and non-cash benefits. However, it is crucial to remember that these arrangements must be unrelated to referrals, meticulously monitored and documented, and formally authorized by all parties involved.

It is worth noting that NPP total compensation must be at fair market value (FMV), which can fluctuate based on market, discipline, and specialty. As CMS does not set parameters for NPP salaries, signing bonuses, or benefits, determining and documenting FMV is the responsibility of the hospitals and physician groups involved. To ensure compliance, it is recommended that all parties are provided with a written summary of the FMV analysis and review the analysis and its underlying data sources and methodology.

When it comes to billing practices for NPPs, there are three primary models: direct billing of services, incident to a physician's service, and shared/split visit services with a physician. For direct billing, eligible NPPs can bill their services directly to the Medicare program if they are within the NPP's scope of practice as defined by state law. However, it is important to note that PAs cannot bill their services directly to Medicare. Under the "incident to" billing model, services furnished by NPPs may be billed under a physician's provider number as long as they meet specific requirements, such as being an integral part of the physician's service and being furnished under the physician's direct supervision. Lastly, the shared/split visit model involves an E/M visit performed in part by both a physician and an NPP, with payment made to the practitioner who performs the substantive portion of the visit.

Physician assistants and the anti-kickback statute

Physician assistants are not directly subject to the Stark Law, which applies only to physicians. However, they are mentioned in an exception to the law that covers remuneration paid to practice groups for the purpose of employing them.

The Anti-Kickback Statute (AKS), on the other hand, is a criminal statute that applies to anyone engaging in business with a federal healthcare program. This includes physician assistants. The AKS prohibits the exchange or offer to exchange anything of value to induce or reward the referral of business reimbursable by federal healthcare programs.

Violations of the AKS may result in fines of up to $25,000, up to five years in jail, and exclusion from Medicare and Medicaid care programs.

It is important to note that the Stark Law and the AKS are two different laws with distinct scopes and requirements, and both should be considered when evaluating compliance in the healthcare industry.

Physician assistants and the False Claims Act

The False Claims Act (FCA) is a US federal law that protects the government from being overcharged or sold shoddy goods or services. It is illegal to submit claims for payment to Medicare or Medicaid that one knows or should know to be false or fraudulent.

Under the FCA, no specific intent to defraud is required. The FCA defines "knowing" as including not only actual knowledge but also instances in which the person acted in deliberate ignorance or reckless disregard of the truth or falsity of the information.

The FCA contains a whistleblower provision that allows a private individual to file a lawsuit on behalf of the US government and entitles the whistleblower to a percentage of any recoveries. Whistleblowers could be current or ex-business partners, hospital or office staff, patients, or competitors.

The FCA also includes a criminal component, under which criminal penalties for submitting false claims include imprisonment and criminal fines.

The Stark Law, or the Physician Self-Referral Law, is a set of regulations in the US that prohibit physicians from referring Medicare or Medicaid patients to receive designated health services (DHS) at certain facilities if the physician has a financial connection to the facility. A financial relationship means that the physician or an immediate family member has a stake in the facility and benefits financially from the patients self-referred.

The Stark Law does not apply to non-physicians such as nurse practitioners and physician assistants. However, a recent proposed rule by the Centers for Medicare and Medicaid Services (CMS) included an exception that covers remuneration paid to practice groups for the purpose of employing nurse practitioners or physician assistants.

There have been cases where physicians and their practices have had to pay substantial sums to resolve allegations that they violated the FCA by charging Medicare and Medicaid for services provided by physician assistants who were not properly supervised.

Physician assistants and the in-office ancillary services exception

The Stark Law, or the Physician Self-Referral Law, is a set of regulations in the United States that prohibits physicians from referring Medicare or Medicaid patients to receive Designated Health Services (DHS) if the physician has a financial connection to the facility. The law applies only to physicians and does not cover nurse practitioners or other advanced practice nurses.

The Stark Law does not directly apply to non-physicians such as physician assistants. However, an exception covers remuneration paid to practice groups for the purpose of employing physician assistants.

One of the most important Stark exceptions is the in-office ancillary services exception (IOAS) that applies to both physician ownership/investment arrangements and physician compensation arrangements. The purpose of the IOAS is to enable a physician or a group practice to order and provide DHS in the physician’s office or the group practice’s office.

The IOAS does not mandate how much ownership a physician must have in an entity. However, it does address physician ownership in an entity billing for DHS. To qualify for the exception, the DHS must be billed by one of the following:

• The physician performing or supervising the service.
• The group practice of which the performing or supervising physician is a member under a billing number assigned to the group practice.
• The group practice if the supervising physician is a “physician in the group practice” under a billing number assigned to the group practice.
• An entity that is wholly owned by the performing or supervising physician or by that physician’s group practice under the entity’s own billing number or under a billing number assigned to the physician or group practice.
• An independent third-party billing company acting as an agent of the physician, group practice, or entity (specified in the statute) under a billing number assigned to the physician, group practice, or entity, provided that the billing arrangement meets the requirements of this chapter.

A “group practice” under the IOAS means a physician practice that must meet the following conditions:

• The group practice must consist of a single legal entity operating primarily for the purpose of being a physician group practice in any organizational form recognized by the state.
• The group practice must have at least two physicians who are members of the group (whether employees or direct or indirect owners).
• Each physician who is a member of the group must furnish substantially the full range of patient care services that the physician routinely furnishes, including medical care, consultation, diagnosis, and treatment, through the joint use of shared office space, facilities, equipment, and personnel.
• At least 75% of the total patient care services of the group practice members must be furnished through the group and billed under a billing number assigned to the group, and the amounts received must be treated as receipts of the group.
• The overhead expenses of, and income from, the practice must be distributed according to methods that are determined before the receipt of payment for the services giving rise to the overhead expense or producing the income.
• The group practice must be a unified business having at least the following features: centralized decision-making by a body representative of the group practice that maintains effective control over the group’s assets and liabilities, and consolidated billing, accounting, and financial reporting.

The IOAS exception is often referred to when a physician owns an ambulatory surgery center or a lab. While most DHS can fit under the IOAS exception, durable medical equipment (DME) does not.

The U.S. Government Accountability Office (GAO) conducted several studies of self-referred services subject to the IOAS exception to the Stark Law. Although none of the GAO studies suggested repealing the exception, such proposals have been made by members of Congress and the Administration. To further explore the issue, the American Medical Association (AMA) contracted for a study that examined Medicare claims for services that received recent GAO scrutiny. The data do not support the contention that self-referral causes over-utilization or increased Medicare spending.

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