If you’re in healthcare, you’ve probably heard of the Stark Law, also called the Physician Self-Referral Law. It’s a key piece of legislation aimed at preventing conflicts of interest in patient referrals. While many assume it only applies to doctors, the reality is more complex. A wide range of organizations can get caught in its net.
Understanding who falls under the Stark Law is key to staying compliant and avoiding costly penalties. In this post, we’ll break down the basics, clear up common misconceptions, and share practical tips for keeping your referral and compensation structures in line with federal standards.
The Stark Law, or Physician Self-Referral Law, prohibits physicians from referring patients to receive certain health services payable by Medicare or Medicaid from entities with which the physician (or an immediate family member) has a financial relationship, unless an exception applies.
In simpler terms: If a doctor or their family stands to benefit financially from a referral, that referral might violate the Stark Law.
This law was designed to prevent overutilization of services, reduce healthcare costs, and protect patients from unnecessary treatments driven by financial gain.
Not exactly. While the Stark Law was designed to regulate physician referrals, its impact reaches far beyond doctors. If your healthcare business provides designated health services (think clinical labs, imaging centers, physical therapy, or durable medical equipment) and bills Medicare or Medicaid, the Stark Law likely applies to you even if you are not a physician.
Here is the key:
So, even if you are an administrator, a compliance officer, or run a healthcare practice, staying compliant with the Stark Law is crucial to protect your business from violations.
It’s easy to confuse the Stark Law, the Anti-Kickback Statute (AKS), and the False Claims Act (FCA) because they all deal with healthcare fraud and compliance; however, they target different behaviors.
Here’s a quick breakdown of how they differ:
In short, the Stark Law limits who you can refer to, the Anti-Kickback Statute limits why you refer, and the False Claims Act governs what you bill for.
Several common exceptions allow certain referral and compensation arrangements:
These exceptions are not always straightforward. The fine print can get tricky, which is why it is a good idea to check in with a healthcare compliance lawyer before making any assumptions.
The Stark Law might look simple on paper, but in the real world? It can be a minefield.
The reality is that referral structures, compensation agreements, and financial relationships in healthcare rarely fit into neat categories. Even well-meaning providers can run into compliance issues without realizing it.
Since the Stark Law is a strict liability statute, intent does not matter. A misstep can still result in penalties. That is why healthcare providers, practice administrators, and healthcare businesses must work closely with an experienced healthcare compliance lawyer. Legal guidance ensures that your referral relationships and compensation structures align with federal regulations, reducing risk and keeping your operations clear and compliant.
The Stark Law and related healthcare regulations aren’t static. They shift and expand, complicating referral relationships and compensation models. If you are unsure of how these rules could affect you and your healthcare practice or business, it’s worth speaking with a healthcare law attorney who knows the landscape.
At Fenton Jurkowitz Law Group, we help healthcare providers stay compliant, protect their operations, and avoid costly missteps. Reach out through our website today to connect with a healthcare attorney who can help keep your practice on track.