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Stark Act

 

The Stark Act is a law with limitation on certain physician referrals. It prohibits physician referrals of Designated Health Services (DHS) for Medicare and Medicaid patients if the physician (or an immediate family member) has a financial relationship with that entity. A financial relationship includes ownership, investment interest, and compensation arrangements. The term “referral” means, for Medicare Part B services, “the request by a physician for the item or service” and, for all other services, “the request or establishment of a plan of care by a physician which includes the provision of the designated health service.” DHS includes clinical laboratory services, as well as, the following:

 

• Physical-therapy services;
• Occupational-therapy services;
• Radiology, including magnetic resonance imaging, computerized axial tomography scans, and ultrasound services;
• Radiation-therapy services and supplies;
• Durable medical equipment and supplies;
• Parenteral and enteral nutrients, equipment, and supplies; prosthetics, orthotics, and prosthetic devices;
• Home health services and supplies;
• Outpatient prescription drugs; and
• Inpatient and outpatient hospital services.

 

The Stark Law contains several exceptions which 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 relationship; etc.