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When conducting business, health care providers must navigate many complicated regulations, such as the federal physician self-referral prohibition (commonly known as the Stark law), the federal Anti-Kickback Statute, and myriad state fraud and abuse statutes that may or may not mirror the federal rules. Entrepreneurial health care businesses may be further restricted by corporate practice of medicine prohibitions, fee-splitting prohibitions, notice requirements, Medicare conditions of participation or certification requirements and billing rules (such as the Anti-Markup rule). At Wachler Associates, we have been helping providers navigate these difficult areas of the law for over 25 years. We have completed Stark and other regulatory analyses for many types of providers, such as group practices, hospitals, physician-hospital organizations, physician organizations, physician owned distributorships, equipment leasing companies and diagnostic testing facilities to name a few. Whatever your healthcare business venture may be, our attorneys can help you recognize the potential regulatory pitfalls so that you can plan and conduct your business in compliance with health care fraud and abuse laws such as the Stark regulations and the Anti-kickback statute.

Stark Law Overview

The physician self-referral prohibition, commonly known as the Stark law, is a complex set of regulations that has constantly expanded since its initial publication in 1995. At that time, Stark only applied to clinical laboratory services. Now, Stark applies to a large number of services (referred to as the Designated Health Services or DHS ) as well as virtually any financial relationship between a physician and the entity performing or billing for the DHS. In short, physicians are prohibited from referring DHS payable by Medicare or Medicaid to any entity with which the physician (or an immediate family member) has a financial relationship unless an exception is met. If no exception exists, severe penalties exist including denial of payment, refund of payment, imposition of a $15,000 per service civil monetary penalty and imposition of a $100,000 civil monetary penalty for each arrangement considered to be a circumvention scheme.

Our experienced health care attorneys can help you analyze whether the Stark law applies to your relationships and whether there is an exception available. If there is an exception available, we can help you to structure your contracts, procedures and policies to comply with Stark. We recommend that you revisit this analysis on at least a yearly basis (if not more frequently) to make sure that your relationships, the DHS you perform and the law have not changed in a way that has rendered you out of compliance.

Anti-Kickback Statute and Related Laws

Most situations that potentially implicate the Stark laws must also be analyzed under the Anti-kickback statute and other health care regulations. The Anti-kickback statute provides criminal penalties for individuals or entities who knowingly and willfully offer, pay, solicit or receive remuneration in order to induce business payable by Medicare or Medicaid. A violation of the anti-kickback statute could result in fines of up to $25,000, imprisonment of up to five years, or both. In addition, a violation could result in exclusion from the Medicare program.

There are many other laws, both federal and state, which create potential liability for providers and other health care businesses including state anti-kickback statutes, state self-referral prohibitions (similar to the federal Stark regulations, but often applicable to all forms of payors). Health care businesses and providers also must be aware of the corporate practice of medicine prohibitions that exist in many states and specific Medicare rules that apply to different types of providers. Some examples of Medicare rules that can cause problems for health care businesses include the Anti-Markup Rule, conditions of participation for various entities and performance, licensure or certification standards.

Whether you are addressing these issues during business planning or whether you have a specific concern, our experienced attorneys can help you understand and comply with these many complicated health care regulations.

Frequently Asked Questions

For a list of frequently asked questioned relating to Stark and other fraud and abuse issues, please click here .

Outside Resources

For more information, please see CMS s overview located here .