The Stark Law applies to all relationships that physicians have with designated health services entities, and pharmacies are classified as such. Because of this, referral relationships between physicians and pharmacists can be scrutinized through the lens of the Stark Law.
Does the Stark Law apply to physicians?
The Stark Law not only applies to physicians directly, but also immediate family members of a physician.
What are the Stark Law exemptions?
In the event the Stark Law applies, an exception must be met. Initially, the Stark Law exceptions were limited to more common financial arrangements with physicians such as ownership of a laboratory or leasing of equipment. However, over the past three decades the Stark Law has been revised to recognize other financial arrangements.
What happens if you violate the Stark Law?
If an exception is not met and the Stark Law applies, a violation of Federal law occurs. The penalties for a Stark Law violation are significant. First, any physician or entity that violates the Stark Law could be excluded from participating in the Medicare and Medicaid programs.
What is the difference between Stark Law and AKS?
The general and overly broad response is that the Stark Law, 42 USC § 1395nn, only applies to Medicare and Medicaid. The AKS, 42 USC § 1320a-7b (b)),applies to any federal healthcare program. Is there a difference between AKS and Stark? Answer: Yes. As discussed above, the first difference is that AKS applies to all federal healthcare programs.
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Does the Stark Law apply to pharmaceutical companies?
…it is the person or entity to which Medicare makes payment. As a result, pharmaceutical or medical device manufacturers generally are not covered by the Stark law.
What are exceptions to the Stark Law?
For example, the following exceptions to the Stark Law require a written, signed agreement: office space and equipment rental, personal service arrangements, physician recruitment arrangements, group practice arrangements, and fair market value compensation arrangements.
Which of the following are exceptions under Stark?
Some exceptions to the Stark Law include but are not limited to the following: Rental of office space. Rental of certain equipment. Bona fide employment relationships.
What 5 elements must exist for a Stark Law violation to occur?
In order for a relationship to implicate Stark, five basic elements must be present: (1) a physician must make (2) a referral for the furnishing of (3) designated health services payable by Medicare (4) to an entity (5) with which he/she (or an immediate family member) has a financial relationship.
What is an example of a Stark Law violation?
An example of a Stark law violation is a hospital paying doctors money to refer cardiac patients to their hospital. Similarly, it is a violation of Stark for a laboratory or outpatient clinic to pay hospitals to refer patients to them.
What is the difference between the federal Anti-kickback law and the Stark Law?
The Anti-Kickback Law covers referrals for all services from anyone including physicians or pharmaceutical companies. Conversely, the Stark Law is for referrals from physicians only and covers a set list of “Designated Health Services” (DHS).
What are the three groups of stark exceptions?
Some Stark Law approved exceptions are related to just compensation. Other exceptions are related to just ownership and investment. Many exceptions are related to all three – compensation, ownerships, and investment.
What is considered to be an illegal provider relationship?
Above or Below Market Rates: Whenever a referral source is paid more for his or her services than the fair market value of those services (i.e., the price that would be paid between parties not in a position to make and receive referrals), an illegal arrangement may exist.
Is a safe harbor an exception to the Stark Law?
This safe harbor requires no assumption of downside risk by parties to a value-based arrangement. The Stark Value-Based Arrangements exception protects physician compensation arrangements that qualify as value-based arrangements, regardless of the level of risk undertaken though the arrangement.
What is the difference between Stark Law and False Claims Act?
Both statutes work to help eliminate fraud against the U.S. government. However, the Stark Law is more finely tuned toward prohibiting the specific act of misconduct involving physician kickbacks. The Stark Law is not often enforced but has become popular thanks to a resurgence of FCA cases against healthcare fraud.
What is considered Medicare abuse?
What Is Medicare Abuse? Abuse describes practices that may directly or indirectly result in unnecessary costs to the Medicare Program. Abuse includes any practice that does not provide patients with medically necessary services or meet professionally recognized standards of care.
What is the False Claims Act in healthcare?
In sum, the False Claims Act imposes liability on any person who submits a claim to the federal government that he or she knows (or should know) is false. An example may be a physician who submits a bill to Medicare for medical services she knows she has not provided.
Is a safe harbor an exception to the Stark Law?
This safe harbor requires no assumption of downside risk by parties to a value-based arrangement. The Stark Value-Based Arrangements exception protects physician compensation arrangements that qualify as value-based arrangements, regardless of the level of risk undertaken though the arrangement.
Which of the following is prohibited by the Anti-Kickback Statute?
Under the provisions of the Anti-Kickback Statute, the law prohibits the soliciting, receiving, offering, or paying any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or kind.
What is the in office ancillary services exception?
In-Office Ancillary Services Exception. (IOAS) • The IOAS exception allows certain services (other than durable medical equipment and. parenteral and enteral nutrients) to be provided ancillary to medical services provided by a physician or group practice so long as certain requirements are met.
How can we prevent Stark laws?
The best way to avoid Stark Law violations is to enlist healthcare attorney who can look over agreements and assist in structuring them.
What can I do to avoid violating the Stark Law?
For entities looking to stay on the right side of the rules, there are a variety of compliance recommendations. Business entities should:
Does the Stark Law apply to all healthcare referrals?
No. As mentioned above, the Stark Law only applies to Medicare participants who receive a referral for a designated health service. This means that a referral for a private-pay (or even self-pay) patient would not fall under the law’s requirements.
What is the Stark Law?
The Stark Law is primarily a strict liability statute. This means that if an arrangement does not meet all of the requirements of an exception, the Stark Law has likely been violated. It is important to remember that a “referral” of a “designated health service” is required for an arrangement to implicate the Stark Law.
How many categories of health services are there in the Stark Law?
In actuality, there are 10 different categories of designated health services that are applicable to the Stark Law. One of the only Stark Law definitions that implicates a knowledge requirement is the indirect ownership interest definition.
What is a referral under Stark Law?
A referral under the Stark Law is extremely broad. For example, it can be a request by a physician for an item or service, a request by a physician for a consultation with another physician, or the mere establishment of a plan of care. Thus, any referrals extending from those examples would likely be considered a referral for Stark Law purposes.
What is the penalty for violating the Stark Law?
Another lesser known civil monetary penalty that can occur for a Stark Law violation is the circumvention civil monetary penalty. In short, if an arrangement is created and developed for the purpose of circumventing the Stark Law, there could be a $100,000 penalty in addition to any other penalties.
How much did the Stark Act settle?
In any event, the Stark Law has resulted in settlements nearing $100 million and is certainly a law that healthcare organizations focus on. The following is a list of 20 Stark Law Facts: The Stark Law or Stark Act is also known as the Physician Self-Referral Law; however the name of the law comes from a United States Congressman named Peter Stark.
Is there an exception to the Stark Law?
Oddly enough the Stark Law contains an exception that is solely specific to Puerto Rico. The exception relates to ownership or investment in hospitals by physicians in Puerto Rico. No other exception under the Stark Law specifically mentions a geographic location as a part of the specific requirements.
Does the Stark Law apply to a doctor?
If neither of those are a part of an arrangement, the Stark Law is not implicated. The Stark Law only applies to physicians. By Federal definition a physician is a MD, DO, DDS, DPM, Optometrist, or Chiropractor. The Stark Law does not apply to Nurse Practitioners or other Advanced Practice Nurses.
What is the goal of the new safe harbor and Stark exception?
The goal of the new safe harbor and Stark exception is to facilitate the donation of cybersecurity technology to recipients that may not be able to afford adequate protection against cyberattacks. The technology/services must be “necessary and used predominantly to implement, maintain, or reestablish cybersecurity.” The parties have the discretion to decide what technology/services qualify for protection. Donors cannot take into account the volume or value of referrals or other business generated between the parties, Under the safe harbor, the arrangement must be set forth in writing and signed by the parties. On the other hand, CMS requires that the arrangement be documented in writing (e.g., exchange of emails).
What are the new Stark VBE exceptions?
Pharmacies can enter into coordination of care arrangements with treating physicians in accordance with (i) the new Stark VBE exceptions: (a) Full Financial Risk exception; (b) Meaningful Downside Financial Risk to the Physician exception ; and (c) Value-Based Arrangements exception; and (ii) the new AKS VBE safe harbors: (a) Value-Based Arrangements with Full Financial Risk safe harbor; (b) Value-Based Arrangements with Substantial Downside Risk safe harbor; and (c) Care Coordination Arrangements safe harbor.
What are CMS and OIG finalized changes to the EHR exception to Stark and the EHR safe harbor to?
CMS and the OIG finalized changes to the EHR exception to Stark and the EHR safe harbor to the AKS. The final rules (i) remove the sunset provision, (ii) allow the recipient to pay its portion of the EHR at reasonable intervals; (iii) delete the prohibition on donating replacement technology; and (iv) delete the prohibition on the donor taking any action to limit or restrict the use, compatibility, or interoperability of the items or services with other e-prescribing or electronic health record systems.
What is the challenge of Stark and the AKS?
The challenge is that VBC has run up against the prohibitions and restrictions of the federal physician self-referral law (Stark) and the federal anti-kickback statute (AKS). Stark and the AKS came into existence when health care was almost entirely based on FFS. 1 And while there have been modifications/updates over the years to Stark and the AKS, such updates have not addressed how these two statutes fit within the VBC framework.
What is set in advance in Stark?
The modification to the Stark definition of “set in advance” to allow the modification of compensation during the term of an agreement where the modified compensation is not based on the volume or value of referrals.
Does the OIG remove the safe harbor requirement?
In addition, the OIG removed the current safe harbor requirement that the aggregate payment for a management or services arrangement be set out in advance. Going forward, only the methodology needs to be set in advance. This makes the safe harbor consistent with the parallel Stark exception. The OIG also removed the requirement that a part-time arrangement have a schedule of services specifically set out in the written agreement.
Is Stark a civil statute?
Stark is a civil statute. It states that if a physician 2 (or an immediate family member) has a financial interest (ownership or compensation) in a health care provider, then the physician cannot refer a Medicare/Medicaid patient to the provider for designated health services (DHS) ...unless a Stark exception is met. The AKS is a criminal statute.
Understanding the Stark Law
The Stark Law guides physicians to practice their profession with integrity. It allows you to avoid incurring fines by steering clear of unlawful self-referrals in the medical industry. It’s vital to develop a comprehensive understanding of the Stark Law.
Stark Law Definition
The Physician Self-Referral Law — the Stark Law — refers to Section 1877 of the Social Security Act (the Act) (42 U.S.C. 1395nn). The Stark Law is defined as a set of regulations that prohibit the self-referral of physicians under federal law. It imposes limitations on any financial and business transactions physicians may become involved in.
How the Stark Law Developed
The Stark Law was first enacted in 1992, according to StatPearls. It initially applied to physician referral for clinical laboratory services and later expanded in 1995 to cover designated health services.
Designated Health Services (DHS)
According to the Centers for Medicare & Medicaid Services (CMS), the following services are covered by the Stark Law under the DHS category:
Stark Law Importance
The U.S. Department of Health and Human Services Office of Inspector General (OIG) includes the Stark Law as one of the five most important federal fraud and abuse laws applying to physicians. The other laws include the Anti-Kickback Statute (AKS), False Claims Act (FCA), Exclusion Authorities, and Civil Monetary Penalties Law (CMPL).
Civil Law or Criminal Statute?
The Stark Law is considered a federal civil law — not a criminal statute. Violations are categorized as non-criminal charges, but they can lead to higher amounts of financial penalties compared to a criminal statute like the AKS.
Consequences of Stark Law Violations
There are serious repercussions for physicians and entities who do not follow the Stark Laws. The American Society of Anesthesiologists (ASA) explains that these are some of the consequences of Stark Law violations:
What is the Stark Law?
The Stark Law is a strict liability law. This means that intent is irrelevant and if the Stark Law requirements are not met, there are significant penalties. In order to ensure compliance with the Stark Law, organizations and individuals must ensure an exception is met. If an exception is not met and the Stark Law applies, ...
What are exceptions to the Stark Law?
In the event the Stark Law applies, an exception must be met. Initially, the Stark Law exceptions were limited to more common financial arrangements with physicians such as ownership of a laboratory or leasing of equipment. However, over the past three decades the Stark Law has been revised to recognize other financial arrangements. Those include exceptions for employment with hospitals, in office ancillary services, and even arrangements in which non-monetary benefits are exchanged. For more information on Stark Law Exceptions see our page.
What happens if you don't meet the Stark Law?
If an exception is not met and the Stark Law applies, a violation of Federal law occurs. The penalties for a Stark Law violation are significant. First, any physician or entity that violates the Stark Law could be excluded from participating in the Medicare and Medicaid programs.
Does Stark Law go to trial?
In the event there is no voluntary self-disclosure, Stark Law Settlements occur when a case is brought in court. While most Stark Law Cases do not go to trial, the Federal Government may choose to intervene in the event a private citizen has brought an action. Here are statistics from CMS on voluntary disclosures.
What are the laws of Stark?
While federal Stark and anti-kickback laws, and state law equivalents (often known as “mini-Stark” and “fee-splitting prohibitions”) are very complex, there 5 key legal rules you’ll want to know. Think of these as The Five People You Meet in Heaven —only you meet them on Earth, and they don’t teach you about love or forgiveness or sacrifice ...
How much did Intermountain pay for Stark?
According to an article in Modernhealthcare.com entitled, Intermountain to pay $25.5 million to settle Stark case, the health system reportedly “characterized the violations as ‘technical in nature’ and said they arose partly because of the 300 pages of federal regulations and commentary that govern financial relationships between hospitals and physicians. “
Can a physician present a claim to a third party?
Where DHS are involved and the referral is prohibited, the physician may not present a claim to any third-payer for the same.
Is there a safe harbor for ASCs?
There are plenty of Stark exceptions and AKS safe harbors. For example, under 42 CFR 1001.952 (r), a safe harbor exists for ambulatory surgery centers (AS Cs). Specifically:
Can a physician refer a patient to a DHS?
The federal self-referral statute (“Stark”) provides that if a physician (or immediate family member) has a financial relationship with an entity, then, unless the arrangement qualifies for a specific exception: The physician may not refer patients to the entity for “designated health services” (“DHS”) payable by federal health care programs ...
Does PORA apply to healthcare licensees?
PORA applies to healthcare licensees. Even if none of the designated health services in the statute are being provided, then the prohibition is inapplicable; however, a disclosure of the financial interest must be provided to patients at the time of the referral.
What is the importance of the Stark law?
Anti-Kickback statutes (AKS) and Stark law are extremely important issues in health care. Violations of these laws yield harsh penalties. Yet, many healthcare professionals have little to no knowledge on the details of these two legal beasts.
What is the difference between AKS and Stark?
One other important aspect of Stark is that is considered “strict liability,” whereas AKS requires a proving of a “knowing and willful” action.
What is AKS in health care?
Other than Medicare and Medicaid, AKS applies to any health care plan that utilizes any amount of federal funds. For example, AKS applies to Veterans Health Care, State Children’s Health Programs (CHIP), Federal Employees Health Benefit Program, and many other programs with federal funding.
Is there a safe harbor for AKS?
Safe harbors (exceptions to AKS) exist. But those exceptions better fit squarely into the definition of the exceptions. Because there are no exceptions beyond the enumerated exceptions. AKS is much more broad in scope than Stark. Other than Medicare and Medicaid, AKS applies to any health care plan that utilizes any amount of federal funds.
Does the Stark Law apply to Medicare?
The general and overly broad response is that the Stark Law, 42 USC § 1395nn, only applies to Medicare and Medicaid. The AKS, 42 USC § 1320a-7b (b)),applies to any federal healthcare program.
Can a Stark physician refer a patient to a provider?
The Stark physician self-referral statute states that if a physician has an owner-ship/compensation arrangement with a provider that furnishes “designated health services,” then the physician can-not refer patients, covered by Medicare or Medicaid, to the provider. A pharmacy falls within the definition of a provider that furnishes DHS. There are a number of exceptions to Stark. Two of the exceptions are the non-cash/non-cash equivalent expenditure exception, and the personal services exception. The non-cash/non-cash equivalent expendi-can
Can a pharmacy pay a physician?
Additionally, the pharmacy can pay the physician for legiti-mate services. For example, if the pharmacy has a legitimate need for a medical director, then the pharmacy and physician can enter into a medical director agreement that complies with both the PSMC safe harbor to the Medicare anti-kick-back statute and the personal services exception to Stark.
