While the CMS and Justice Department have shown minimal activity around the Stark law since 2023, the law remains a significant compliance concern for healthcare providers, The National Law Review reported Nov. 11
Here are nine things to know from the report:
1. No major regulatory changes have been issued in the past four years, and enforcement actions have been limited.
2. The Stark law remains in effect as a strict liability statute with a six-year lookback period. This means providers can still face penalties for violations even during periods of reduced enforcement.
3. Key compliance risks persist, including inaccurate fair market value assessments for physician payments, unsigned or missing contracts and improper financial relationships between physicians and entities receiving referrals.
4. The report advises providers to use this period of relative quiet to audit and strengthen compliance programs, particularly those involving physician arrangements and designated health services.
5. The Stark law prohibits physicians from referring Medicare patients for certain designated health services to entities with which they have a financial relationship. These services include laboratory, therapy and imaging services, as well as durable medical equipment, prescription drugs and hospital services.
6. The law contains more than 40 exceptions, each with detailed documentation and administrative requirements. Compliance depends on correctly applying these exceptions.
7. Common pitfalls for providers include paying physicians above fair market value, maintaining incomplete or missing contracts, structuring arrangements based on referral volume or value, and allowing improper physician ownership or investment.
8. To reduce risk, providers should identify all direct and indirect physician relationships, conduct fair market value reassessments, and audit contracts and documentation processes.
9. Experts expect enforcement to pick up again. Providers who strengthen compliance efforts now will be better prepared when scrutiny returns, reducing exposure and improving regulatory readiness.