The contracts and agreements that doctors, hospitals, and medical practices form with other healthcare providers are regulated by two federal laws: Stark Law and the Anti-Kickback Statute, both of which impose restrictions on a physician’s ability to make referrals to designated health services (DHS) a physician may refer his or her patients. We assist physicians with compliance with these laws and in resolving issues involving possible violations.
Stark Law, also known as the Physician Self-Referral Law, specifically prohibits physicians from referring patients to DHS providers in which the physician (or a direct family member of the physician) has ownership, investment interest, or a compensation arrangement, whether those are direct or indirect, unless a recognized exception applies. These referrals, called “self referrals,” are punishable by denial of Medicare to the designated health service and a fine of up to $100,000 to the physician and/or the DHS provider.
The Anti-Kickback statute forbids the payment or receipt of any form of compensation for making referrals or purchasing/leasing medical equipment, services, facilities, or other items that would be covered by Medicare or Medicaid. The statute applies to any type of healthcare provider that might make a referral, not just physicians. While there may be a legitimate reason for an exchange of compensation (or the offer of compensation) that might precede such a referral, the Office of the Inspector General of the US Department of Health and Human Services has stated that if even one of the purposes of such a payment is to induce a referral, this constitutes a violation.
There are “Safe Harbor” exceptions to the Anti-Kickback Statute for arrangements that include:
- Bona Fide Employees
- Personal Services and Management Contracts
- Discounts to Healthcare Providers if the discount is correctly disclosed and shown in charges submitted by providers to federal healthcare programs
Violations on either end of the transaction are considered a felony, punishable by up to $25,000 in fines and 5 years in jail. Therefore, it is vital for physicians and vendors to examine their contracts in order to prevent a possible violation of this law.
Ensuring Compliance with Stark Law and the Anti-Kickback Statute
While there are a few exceptions to the limitations set in these laws, they are heavily restricted to very specific scenarios. Therefore, ensuring your practice’s business relationships remain in full compliance with Stark Law and the Anti-Kickback Statute is a matter for which you will want to enlist the council of experienced Stark law attorneys.
If you find that you are at risk for being sanctioned for violations of Stark Law, you may self-disclose potential violations to the Centers for Medicare and Medicaid Services (CMS). The self-disclosure protocol is a detailed process requiring the completion of several forms and certification of their accuracy. It is recommended that you seek the assistance of counsel experienced with this process if you need to self-disclose Stark Law violations.
We provide full Stark and Anti-Kickback review to make sure your business relationships and referral practices are in full compliance with the law. This includes a review of contracts, ownership structures, and administrative practices within your organization in order to make sure you have neither substantive or technical violations. It is essential to have these items reviewed by a skilled Stark law attorney in order to ensure compliance and prevent the heavy penalties that come with violations.