It’s not hard to violate Stark law without realizing it, which means you’re always exposed to Stark law violations. Also, there are certain situations in when Stark does not apply—making your compliance strategy even trickier to master.
Good news: Recent Stark law amendments and case law may provide you with some breathing room for unintended Stark law violations, such as neglecting to renew a contract, according to Wayne J. Miller, Esq., in his audio conference, “Stark Law Violation: Now What Do We Do?”
What the Law Says
The U.S. Department of Health and Human Services (HHS) has authority over Stark law, and the Centers for Medicare & Medicaid Services (CMS) is responsible for overseeing the law’s enforcement.
Generally, Stark law prohibits Medicare payment for claims resulting from physician referrals for certain designated health services to an entity in which the physician (or an immediate family member) has an ownership interest or compensation arrangement, according to Health Care Law Today.
When Stark Does Not Apply
There are certain exceptions to Stark law that allow physicians to make referrals for federally covered designated health services in certain circumstances, according to Barrett & Singal.
Here are some examples of when Stark does not apply:
- In-Office Ancillary Services – A group medical practice may make referrals for in-office ancillary services, such as laboratory or radiology services.
- Fair Market Compensation – You may have a compensation arrangement that involves fair market value compensation, as long as the arrangement is in writing, specifies a timeframe and the compensation that will be provided, involves a commercially reasonable transaction, and meets the “safe harbors” under the Anti-Kickback Statute.
- Indirect Compensation – You may have an indirect compensation arrangement between a physician and an entity if the compensation that the referring physician receives is of fair market value, doesn’t take into account the value or volume of referrals, and is in writing and signed by the parties.
- Non-Monetary – An entity may provide a physician with non-monetary compensation of up to $300 per year, if the physician doesn’t solicit the compensation and the compensation doesn’t take into account the volume or value of referrals.
Similar to the in-office ancillary services exception, Stark law also does not apply to referrals for physician services within the same group practice, according to the American Academy of Family Physicians. The physician doesn’t have to be a member of the group practice and may be a part-time independent contract physician within the group.
Other Stark law exceptions include referrals: within prepaid health plans, to entities in which the physician is invested, in bona fide employment relationships, for personal services arrangements, and for physician recruitment.
How You’ll Enjoy More Relaxed Requirements
New: In early 2018, Congress passed the Bipartisan Budget Act which included changes to Stark law, specifically revisions to allow indefinite holdovers on exceptions for personal services arrangements and equipment and office space rentals. Previously, these holdover allowances were limited to six months, according to Nelson Hardiman Healthcare Lawyers.
Another slight change to Stark law involves satisfying the requirement for arrangements to be set out in writing, according to Foley & Lardner LLP. This would involve the exceptions for office space and equipment rental, personal services arrangements, physician recruitment, fair market value compensation, and indirect compensation arrangements. Under the Act, you would be able to satisfy the writing requirement by a “collection” of documents.
Additionally, the Act revised Stark law’s signature requirements for certain compensation arrangement exceptions involving temporary noncompliance. Under the new statute, you can satisfy the signature requirement if the parties obtain signatures no later than 90 consecutive calendar days immediately following the date on which the compensation requirement became noncompliant. Also, the compensation arrangement must otherwise comply with all criteria of the exception.
Warning: Remain Vigilant with Compliance Efforts
Even though an arrangement may fall into one of the Stark law exceptions, you must remember that the arrangement may still violate the federal Anti-Kickback Statute, Barrett & Singal cautioned. This is especially true if an entity or physician is making referrals in exchange for any type of remuneration.
Bottom line: Knowing both when Stark law applies and when it doesn’t is key to avoiding violations. To make sure you don’t run afoul of Stark law, you need to understand the protocols for limiting your liability risk and how to fix simple problems that could lead to Stark law violations, Miller stresses.
