Many physicians have experienced challenges stemming from Stark law, which bans them from making referrals for Medicare-payable health services if the physician or immediate family member has a financial relationship with the entity.
Here are 10 key considerations to know:
1. Congress added an Anti-Kickback Statute to the Social Security Act in 1972 to combat Medicare and Medicaid fraud, according to a Jan. 16 blog post from The HIPAA Journal. The law prohibits anyone from “knowingly and willfully receiving or paying anything of value to influence the referral of federal healthcare program business.”
2. The Medicare-payable health services include lab services, physical, occupational and speech therapy, durable medical equipment, prosthetics, radiology, home health, pharmaceuticals and inpatient and outpatient services. Stark law also prohibits compensation arrangements based on volume or referral value.
3. Penalties for violating Stark law include up to five years in prison, fines of up to $25,000, civil penalties of up to $50,000 and being added to the HHS OIG Exclusions List, which prohibits providers from participating in federal healthcare programs, according to The HIPAA Journal.
4. Stark law is a strict liability statute, meaning it does not require proof of intent to violate the law. Self-referring physicians can be fined $15,000 for each service in violation, with a potential fine of $100,000 if it is proved they deliberately violated the statute.
5. Congress authorized HSS in 2003 to exempt some referrals from the law provided certain conditions are met, according to the report. The list of exemptions, published through 19 CMS advisory opinions, includes in-office ancillary services, indirect physician compensation and self-referrals in rural areas.
6. CMS has a protocol that allows providers to self-disclose actual or potential violations. CMS settled a record $9.2 million in voluntary self-referral disclosure settlements in 2022. The number of settlements increased from 27 in 2021 to 104 in 2022, with the aggregate amount of settlements increasing from $1.99 million to $9.29 million.
7. Recently, it was ruled that ASCs, physician groups and hospitals can provide non-monetary compensation to physicians up to an amount of $507 in 2024. Non-monetary payments that do not exceed $507 can be provided as long as the pay does not take into account the volume or value of referrals generated by the physician and is not solicited by the physician.
8. The Consolidated Appropriations Act of 2023 updated exceptions to Stark law to allow healthcare providers to improve mental health services for physicians. In June, CMS added a waiver for physician owners of independent freestanding emergency departments that served Medicare patients during the COVID-19 pandemic.
9. In July, Florida passed a law amending supervision stipulations. The legislation removes a direct supervision requirement in which the law’s referral exception only applied if services were being provided under the supervision of the referring provider.
10. From excessive fees to physicians to improper financial relationships, Becker’s reported on four Stark law violations in 2023.
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