What is the Stark Law?
Stark Law is a set of United States federal laws that prohibit physician self-referral, specifically a referral by a physician of a Medicare or Medicaid patient to an entity for the provision of designated health services ("DHS") if the physician (or an immediate family member) has a financial relationship with that entity.
Does the Stark Law apply to physician DHS?
In the event a physician has a financial relationship with an entity that provides DHS, the Stark Law may apply which would require an exception to be met. 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.
What is the Stark II Amendment?
The Omnibus Budget Reconciliation Act of 1993 contained what is known as "Stark II" amendments to the original law. "Stark II" extended the "Stark I" provisions to Medicaid patients and to DHS other than clinical laboratory services.
What are the penalties for a Stark Law violation?
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. Second, if a violation occurs then refunds may need to be made for any payment made by the government based upon prohibited referrals.
What happens if the Stark Law is violated?
The Stark law prohibits the submission, or causing the submission, of claims in violation of the law's restrictions on referrals. Penalties for physicians who violate the Stark law include fines as well as exclusion from participation in the Federal health care programs.
Which governmental agency published the Stark Law Final Rule?
Also effective on January 19, 2021, was a final rule issued by the United States Department of Health and Human Services Office of Inspector General (HHS OIG) that revised several safe harbors to the anti-kickback statute.
Which governmental entity is primarily responsible for enforcement of Stark Why do you think that is?
Center for Medicare and Services The Centers for Medicare and Services (CMS) is the federal agency primarily responsible for enforcing Stark Law. They are tasked with collecting and analyzing data to develop research reports in eliminating healthcare fraud activities in the healthcare system.
How do you ensure compliance with Stark Law?
How to Ensure Compliance with Stark Law and Anti-Kickback Policies and ProceduresImplementing written policies, procedures and standards of conduct.Designating a compliance officer and compliance committee.Conducting effective training and education.Developing effective lines of communication.More items...
Who enforces the Stark II?
The department of justice, CMS, and the department of health and human services oversees the enforcement of the Stark law.
What is another name for the Stark Law?
The physician self-referral prohibition, commonly known as the Stark law, is a complex set of regulations that has constantly expanded since its initial publication in 1995.
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 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 penalty for violating the federal False Claims Act?
$5,000 to $10,000 per violationThe False Claims Act sets penalties at $5,000 to $10,000 per violation. However, subsequent federal law periodically adjusts the amounts for inflation. As of May 9, 2022, FCA penalties range from $12,537 to $25,076 per violation.
How can the violation of Stark Law be prevented?
To protect your organization against Stark law violations, you must ask newly-hired physicians to report any potential conflicts of interest.
What are the 7 core requirements of a compliance program?
However, 7 key elements exist in virtually all legally effective compliance programs:Policies & Procedures.Chief Compliance Officer/Compliance Committee.Education & Training.Reporting.Monitoring & Auditing.Enforcement.Responding To Issues.
Does Stark Law protect whistleblowers?
WHISTLEBLOWER PROTECTION STATUTES The Physician Self-Referral Law, commonly known as the Stark Law, and the Anti-Kickback Statutes are two federal laws that protect whistleblowers and prohibit a wide range of conduct by healthcare providers.
When was the Stark Law passed by Congress?
When the Stark Law was enacted in 1989, healthcare was paid for primarily on a fee-for- service basis. Since that time, Medicare and the private market have implemented many value-based healthcare delivery and payment systems to address substantial cost growth in the current volume-based system.
What is the Stark Law quizlet?
THE STARK LAW. Prohibits a physician from referring Medicare patients. for designated health services to an entity with which. the physician (or immediate family member) has a. financial relationship, unless an exception applies.
When were Stark laws created?
1989The Stark Law was enacted by Congress in 1989 as the Ethics in Patient Referrals Act.
Which government entity prosecutes violations of regulations related to federal government funded healthcare programs?
Government agencies, including the U.S. Department of Justice (DOJ), the U.S. Department of Health & Human Services (HHS), the HHS Office of Inspector General (OIG), and the Centers for Medicare and Medicaid Services (CMS), enforce these laws.
What is the Stark law?
Stark Law is a set of United States federal laws that prohibit physician self-referral, specifically a referral by a physician of a Medicare or Medicaid patient to an entity for the provision of designated health services ("DHS") if the physician (or an immediate family member) has a financial relationship with that entity.
What is a referral for Medicare?
The term "referral" means "the request by a physician for the item or service" for Medicare Part B services and " the request or establishment of a plan of care by a physician which includes the provision of the designated health service" for all other services. DHS includes "clinical laboratory services"; "physical therapy services"; "occupational therapy services"; "radiology services, including magnetic resonance imaging, computerized axial tomography scans, and ultrasound services"; "radiation therapy services and supplies"; "durable medical equipment and supplies"; "parenteral and enteral nutrients, equipment, and supplies"; "prosthetics, orthotics, and prosthetic devices and supplies"; "home health services"; "outpatient prescription drugs"; "inpatient and outpatient hospital services"; and "outpatient speech-language pathology services." A "financial relationship" includes ownership, investment interest, and compensation arrangements.
What are the penalties for Stark Law?
Penalties for violations of Stark Law include: denial of payment for the DHS provided; refund of monies received by physicians and facilities for amounts collected; payment of civil penalties of up to $15,000 for each service that a person "knows or should know" was provided in violation of the law, and three times the amount of improper payment the entity received from the Medicare program; exclusion from the Medicare program and/or state healthcare programs including Medicaid; and payment of civil penalties for attempting to circumvent the law of up to $100,000 for each circumvention scheme.
When did Stark I become law?
In 1988, Stark introduced an "Ethics in Patient Referrals Act" bill concerning physician self-referrals. Some of the ideas in the bill became law as part of the Omnibus Budget Reconciliation Act of 1990. In specific, what is referred to as "Stark I" prohibited a physician referring a Medicare patient to a clinical laboratory if the physician or his/her family member has a financial interest in that laboratory. It was codified in the United States Code, Title 42, Section 1395nn (42 U.S.C. 1395nn, "Limitation on certain physician referrals").
How long does a contract need to be for Stark Law?
Contracts between physicians and hospitals must fit within the seven safe harbors for Stark Law in order to fully alleviate violation risk: the contract's duration must be at least a year; in writing and signed by both parties; specify aggregate payment which is set in advance; payment is reasonable and fair market value; payment must not relate to volume or value of business; the exact services to be performed must be outlined; and be commercially reasonable. Because current processes for monitoring contract compliance and logging physician work hours are often done on paper, the majority of Stark Law violation settlements are the result of technical violations.
Why do physicians own hospitals?
They argue that physicians who own, invest in, or operate medical facilities are responding to a need for medical services which would otherwise not be met, particularly in medically under-served areas. In addition, it is often the case that physician owned entities present a lower-cost alternative to the facilities that are located at hospitals. This is due mostly to higher overhead costs that hospitals must pass down to their services.
Who is the Stark Law named after?
It is named for United States Congressman Pete Stark (D-CA) who sponsored the initial bill.
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 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.
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 is a DHS?
Those services are legally defined as Designated Health Services (“DHS”) which include laboratory, physical therapy, radiology, and hospital services. In the event a physician has a financial relationship with an entity that provides DHS, the Stark Law may apply which would require an exception to be met. The Stark Law is a strict liability law.
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.
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 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:
What is the Stark Law?
The Stark Law is a strict liability statute. This means that proof of intent to violate the law is not a requirement – only proof that the physician overstepped the boundaries of the statute. A physician who makes referrals for prohibited health services faces severe penalties in the complicated arena of healthcare law. It is crucial that a physician truly understands the Stark Law and the steps needed to ensure compliance to avoid serious consequences.
What are the two federal statutes that focus on improper financial recovery?
There are two main federal statutes that focus on improper financial recovery: the Anti-Kickback Statute and the Physician Self-Referral Law. The Physician Self-Referral Law (commonly referred to as the Stark Law), has recently undergone a significant update, however, to eliminate confusion.
Who updated the Stark Law?
The Centers for Medicare & Medicaid Services (CMS) has updated the Stark Law in three main ways, including:
Can hospitals donate cybersecurity software?
This exception allows for the donation of certain cybersecurity software to protect the privacy of all parties.
What are the significant decisions that whistleblowers have made?
Significant Decisions Beginning as early as the mid-1990s, whistleblowers have been achieving legal victories that have helped pave the way to establishing Stark Law violations.29More recent decisions confirm that these legal advances are the result of whistle- blower actions. In United States v. Rogan,30the court held that the former owner and chief executive officer of a medical center caused the medical center to submit false claims to Medicare and Medicaid for services to patients referred by
What is the OIG protocol for self disclosure?
The OIG previously oversaw voluntary self-disclosures of Stark Law violations through its Provider Self- Disclosure Protocol (SDP), which it launched on October 21, 1998. The primary purpose of the SDP was to provide a mechanism for healthcare providers to report voluntarily fraud and abuse affecting federal healthcare programs utilizing less government resources. Since its inception, OIG has issued five open letters providing guidance on the SDP. Seewww.oig.hhs. gov/compliance/self-disclosure-info/index.asp . In the most recent letter, issued in March 2009, the OIG essentially foreclosed its SDP as it related to the Stark Law by stating that it would no longer be available for Stark Law-only violations, and instead, it would only accept self-disclosures of Stark Law violations that included “colorable” violations of the federal Anti-Kickback Statute. The Affordable Care Act, however, requires the Secretary of HHS to ensure a process for providers to self-disclose Stark Law violations. 18 This statement is based on the author’s 24 years of practical experience. 19 31 U.S.C. § 3729, et seq. The FCA prohibits the knowing submission of a false or fraudulent claim for payment to the United States. The FCA also prohibits anyone from causing someone else to submit a false claim. 20 Seewww.taf.org/statistics.htm . 21 Seewww.taf.org/DoJ-fraud-stats-FY2011.pdf . 22 See id.
What is the Stark Law?
Legislative History In 1989, Congress passed legislation, known as Stark I,6which precluded physicians from referring patients to clinical labora- tories with which a physician or immediate family member had a financial relationship.7 Stark I was passed to address concerns that physicians ordered additional, and often medically unnec- essary, laboratory tests when they stood to benefit financially. In 1993, as part of the Omnibus Reconciliation Act of 1993, Congress enacted Stark II, which greatly expanded the federal physician self-referral ban to apply to a total of ten categories of designated health services (DHS).8Stark II was based on a premise similar to that of Stark I; namely, that DHS was highly susceptible to overutilization when the referring physician stood to benefit financially. In enacting Stark II, Congress defined prohibited physi- cian financial relationships more broadly to include both direct and indirect ownership as well as investment interests and compensation arrangements. Underscoring the statute’s importance, the Stark Law was enacted, in large part, as a strict liability statute, requiring the lowest possible standard of proof for establishing a violation. Thus, proof of specific intent to violate the Stark Law is not required to prove liability. In sum, the Stark Law was intended to serve as a bright-line rule for prohibited referrals, thus providing the government with the greatest chance of meeting its burden at trial. Congress authorized the HHS Secretary to create addi- tional regulatory exceptions to the Stark Law, to issue advisory opinions, and to issue regulations interpreting the Stark Law.9
How much has the Federal False Claims Act been recovered?
Since the FCA was amended in 1986, over $34 billion has been recovered under the statute.20In the last two decades, the number of FCA actions filed has increased significantly. For instance, in 1988, only 43 FCA actions were filed. In 2011, however, approximately 638 actions were filed, of which 417 were healthcare-related. Indeed, nearly 75% of all FCA recoveries have come from healthcare cases, amounting to $15.8 billion.22Moreover, 18 of the top 20 FCA recoveries are from healthcare cases.23The federal government is recovering $15 for every $1 invested in FCA healthcare investigations and prosecutions.24
How does fraud affect healthcare?
The ramifications of health- care fraud are far reaching: (1) it depletes billions of dollars from Medicare and Medicaid and other government-funded programs; (2) it adversely impacts the provision of objective quality healthcare; and (3) it bilks federal and state taxpayers out of billions in tax dollars. Improper patient referrals, a long - standing healthcare fraud scheme, place personal profit above patient care and burden the nation with enormous financial costs. As a result, the government has formed legions of task forces, whose sole purpose is to reduce and prosecute healthcare fraud. Emphasizing the government’s reinvigorated focus on this goal, Lewis Morris, the former Chief Counsel of the Depart - ment of Health and Human Services (HHS) Office of Inspector General (OIG), has declared repeatedly that healthcare fraud “is a serious problem that demands an aggressive response.”1
Is the Stark law enforced?
Despite the government’s pronounced resolve to eliminate healthcare fraud, whistleblowers thus far have served as the primary enforcers of the Stark Law. The lack of government enforcement of the Stark Law—especially when compared to the successes achieved by whistleblowers—should be carefully re-evaluated. Indeed, the statute has the lowest standard of proof possible and damages for viola- tions can be substantial. Tremendous bipartisan congressional effort spanning almost 20 years has gone into honing and expanding the Stark Law to ferret out multiple types of inappropriate physician self-referrals. While the Stark Law, in all of its permutations, remains a complex and intricate statute, the cases brought by whistleblowers largely have focused on clearly identifiable violations, and have recouped significant dollars lost to healthcare fraud and abuse. If the government were to investigate Stark Law violations more aggressively, and most importantly, vigorously litigate those cases, a 20-year-old law would achieve more significant recoveries to taxpayers, as well as provide a significant deter- rent to non-compliant providers.
Is CMS a conservative agency?
26AHLA Connections September 2012 it to say, CMS has adopted a conservative approach to its enforce - ment obligations. Considering its current responsibilities, CMS arguably lacks the resources to enforce the Stark Law more aggressively, which could explain why it seems to have assumed a more reactive, rather than proactive, enforcement posture. Most recently, Congress included a provision in the Affordable Care Act that specifically requires the Secretary to establish a self-disclosure protocol to allow providers to self-disclose actual or potential violations of the Stark Law.1721 While requiring CMS to undertake a greater role in addressing disclosed violations, the self-disclosure protocol nonetheless allows CMS to remain in a mostly reactive posture. Although it is the primary agency responsible for enforcing the Stark Law, CMS has not appeared to investigate vigorously or refer cases to other government agencies for enforcement. This approach has resulted in little government-initiated enforcement litigation. Instead, qui tam relators have been the primary drivers of Stark enforcement actions for better and, at times, for worse. In addition to CMS, the OIG is authorized to seek civil monetary penalties and exclusion of providers from participa- tion in federal healthcare programs for Stark Law violations. The OIG also investigates suspected fraud and routinely refers cases to the U.S. Department of Justice (DOJ) for criminal or civil actions. The DOJ, with the assistance of the Federal Bureau of Investigation, has authority to investigate and prosecute violations of the Stark Law if such violations are in conjunction with violations of the Anti-Kickback Statute or the False Claims Act. For practical reasons, however, it seems the DOJ often follows its client CMS’ less-aggressive lead with respect to Stark Law enforcement.18
What are the criminal offenses that OIG is required to exclude from?
OIG is legally required to exclude from participation in all Federal health care programs individuals and entities convicted of the following types of criminal offenses: (1) Medicare or Medicaid fraud , as well as any other offenses related to the delivery of items or services under Medicare or Medicaid; (2) patient abuse or neglect ; (3) felony convictions for other health-care-related fraud, theft, or other financial misconduct ; and (4) felony convictions for unlawful manufacture, distribution, prescription, or dispensing of controlled substances. OIG has discretion to exclude individuals and entities on several other grounds, including misdemeanor convictions related to health care fraud other than Medicare or Medicaid fraud or misdemeanor convictions in connection with the unlawful manufacture, distribution, prescription, or dispensing of controlled substances; suspension, revocation, or surrender of a license to provide health care for reasons bearing on professional competence, professional performance, or financial integrity; provision of unnecessary or substandard services; submission of false or fraudulent claims to a Federal health care program; engaging in unlawful kickback arrangements; and defaulting on health education loan or scholarship obligations.
What is AKS in medical?
The AKS is a criminal law that prohibits the knowing and willful payment of "remuneration" to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks-those who offer or pay remuneration- as well as the recipients of kickbacks-those who solicit or receive remuneration. Each party's intent is a key element of their liability under the AKS.
What is the civil FCA?
The civil FCA protects the Government from being overcharged or sold shoddy goods or services. It is illegal to submit claims for payment to Medicare or Medicaid that you know or should know are false or fraudulent. Filing false claims may result in fines of up to three times the programs' loss plus $11,000 per claim filed. Under the civil FCA, each instance of an item or a service billed to Medicare or Medicaid counts as a claim, so fines can add up quickly. The fact that a claim results from a kickback or is made in violation of the Stark law also may render it false or fraudulent, creating liability under the civil FCA as well as the AKS or Stark law.
Why are physicians attractive to kickback schemes?
As a physician, you are an attractive target for kickback schemes because you can be a source of referrals for fellow physicians or other health care providers and suppliers. You decide what drugs your patients use, which specialists they see, and what health care services and supplies they receive.
What happens if you are excluded from Medicare?
If you are excluded by OIG from participation in the Federal health care programs, then Medicare, Medicaid, and other Federal health care programs, such as TRICARE and the Veterans Health Administration, will not pay for items or services that you furnish, order, or prescribe. Excluded physicians may not bill directly for treating Medicare and Medicaid patients, nor may their services be billed indirectly through an employer or a group practice. In addition, if you furnish services to a patient on a private-pay basis, no order or prescription that you give to that patient will be reimbursable by any Federal health care program.
What are the penalties for violating the AKS?
Criminal penalties and administrative sanctions for violating the AKS include fines, jail terms, and exclusion from participation in the Federal health care programs. Under the CMPL, physicians who pay or accept kickbacks also face penalties of up to $50,000 per kickback plus three times the amount of the remuneration.
What are the penalties for false claims?
There also is a criminal FCA (18 U.S.C. § 287). Criminal penalties for submitting false claims include imprisonment and criminal fines. Physicians have gone to prison for submitting false health care claims. OIG also may impose administrative civil monetary penalties for false or fraudulent claims, as discussed below.
Overview
Enforcement
Multiple federal entities oversee enforcement of Stark Law. These include the Department of Justice, CMS, and the Department of Health and Human Services. In recent years, enforcement of Stark Law has become increasingly aggressive, largely as a result of the Patient Protection and Affordable Care Act and its amendments to the False Claims Act.
2014 saw some of the largest Stark Law violation settlements to date. On June 9, 2015, the Offic…
History
In 1988, Stark introduced an "Ethics in Patient Referrals Act" bill concerning physician self-referrals. Some of the ideas in the bill became law as part of the Omnibus Budget Reconciliation Act of 1990. In specific, what is referred to as "Stark I" prohibited a physician referring a Medicare patient to a clinical laboratory if the physician or his/her family member has a financial interest in that laboratory. It was codified in the United States Code, Title 42, Section 1395nn (42 U.S.C. 139…
Penalties
Penalties for violations of Stark Law include: denial of payment for the DHS provided; refund of monies received by physicians and facilities for amounts collected; payment of civil penalties of up to $15,000 for each service that a person "knows or should know" was provided in violation of the law, and three times the amount of improper payment the entity received from the Medicare program; exclusion from the Medicare program and/or state healthcare programs including Med…
Physician self-referral
Physician self-referral is the practice of a physician referring a patient to a medical facility in which the physician has a financial interest, be it ownership, investment, or a structured compensation arrangement. Critics argue that this practice is an inherent conflict of interest, because the physician benefits from the physician's own referral. They suggest that such arrangements may encourage overutilization of services, in turn driving up health care costs. In addition, they believ…
Risk abatement
Contracts between physicians and hospitals must fit within the seven safe harbors for Stark Law in order to fully alleviate violation risk: the contract's duration must be at least a year; in writing and signed by both parties; specify aggregate payment which is set in advance; payment is reasonable and fair market value; payment must not relate to volume or value of business; the exact services to be performed must be outlined; and be commercially reasonable. Because curr…
Reform proposal
The Stark law may impede certain pay for performance value-based arrangements, which led to discussions around reform as of 2019.
External links
• Omnibus Budget Reconciliation Act of 1989 (P.L. 101-239)
• Omnibus Budget Reconciliation Act of 1993 (P.L. 103-66)
• Social Security Act Amendments of 1994 (P.L. 103-432)
• Why it takes 60 minutes or less to find a stark law violation