More Than 20 Years Of Experience In The Field Of Health Care Law

  1. Home
  2.  | 
  3. Health Law Attorneys
  4.  | The Stark Law and your medical practice: What to know

The Stark Law and your medical practice: What to know

On Behalf of | Jan 23, 2024 | Health Law Attorneys

The Stark Law is a federal statute that regulates the financial relationships in the healthcare industry to prevent fraud and abuse against both patients and the health care system as a whole. 

In general, this “Physician Self-Referral Law” is designed to make certain that medical decisions are based on the best interest of the patient instead of financial considerations. 

What does the Stark Law address?

Specifically, the Stark Law addressed the issue of physicians referring patients to other health care providers and entities with which they have a financial relationship. 

Under the Stark Law, physicians are prohibited from making referrals for designated health services, such as lab services, radiology, physical therapy and more, to entities in which they (and/or their immediate family members) have a financial interest. This prohibition is intended to ensure that medical decisions are based on patient needs rather than financial gain.

However, the Stark Law recognizes that not all financial relationships pose a risk of improper influence. To accommodate legitimate arrangements, the law includes a variety of exceptions and safe harbors. These exceptions provide specific criteria that, if met, allow physicians to maintain financial relationships without violating the law.

How do you ensure Stark Law compliance?

Compliance with the Stark Law is imperative – since noncompliance can lead to severe consequences, including fines, exclusion from federal health care programs like Medicaid and Medicare, and more. This means:

  • Educate your staff: Regular training sessions can help keep everyone informed about the latest updates and compliance regulations, particularly in light of ongoing changes with how technology is used in medicine and medical care.
  • Implement a compliance program: A comprehensive compliance program with clear policies, procedures and monitoring systems can both mitigate risks to the practice and show the intent to adhere to the rules.
  • Conduct regular audits: Regularly audit the practice’s and members’ financial relationships to identify any potential violations so you can rectify any issues quickly.

Given the complexity of health care regulations, it’s always best for a medical practice to consider legal guidance. There are exclusions under the Stark Law that apply to many situations, but it can be difficult to know how to structure financial arrangements so that the practice doesn’t run afoul of the law.