The Stark Law Basics: Definitions, Compliance, and Exceptions
The key excepted financial relationship that need not be in writing is for bona . When a physician's group meets the Stark law's definition of a. Financial relationship, compensation, and ownership or investment . and in paragraphs (1) through (3) of the definition of the term “remuneration” at. Under the Stark Statute a financial relationship between a physician or an The Regulations define both direct and indirect financial relationships Under the.
This requires using a single taxpayer identification number.
Yet simply having one tax ID number is not enough. A group must function as a real group to meet the Stark definition of a group practice. When taken as a whole, the amount of time physician members of the group excluding independent contractors spend in work dedicated to the group must average 75 percent.
11 Key Concepts From the Stark Law
This standard is intended to weed out virtual groups, partially integrated groups and groups in which physicians do not have their core activities dedicated to the group. For example, if five physicians work full time with the group and one works half time with the group and half time with the university, the average for the group would be an accept able But if the part-time physicians were independent contractors, the group would qualify.
Note that just because a physician works part time does not necessarily mean he or she counts as part time. For example, if a family practice group hires two physicians who only work 50 percent of the time but all of their professional time is devoted to the practice, they each count as percent rather than 50 percent.
The Stark Truth About the Stark Law: Part 1 -- FPM
The Stark regulations set forth three profit-sharing models: Groups are not required to use these particular methods; any method is acceptable as long as it is reasonable, objectively verifiable and indirectly related to referrals. Exceptions to the Stark Law There are multiple exceptions to the Stark Law that permit physicians, in certain limited circumstances, to make referrals for federally-covered designated health services.
Some of these exceptions include: In-Office Ancillary Services Exception — One primary exception permits a group medical practice to make referrals for in-office ancillary services such as laboratory or radiology services.
Fair Market Compensation Exception — A second useful exception to the Stark Law allows for fair market value compensation.
Financial Relationship under the Stark Act – Stark Laws
Indirect Compensation Exception — Another exception to the Stark Law permits indirect compensation arrangements between a physician and an entity if the compensation received by the referring physician is of fair market value, does not take into account the value or volume of referrals, and is set out in writing and signed by the parties. However, irrespective of the application of one or more of these, or other, exceptions, referring physicians must at all times remember that even though an arrangement may fall within one of the exceptions to the Stark Law, if the referrals are being made in exchange for any type of remuneration they may still violate the federal Anti-Kickback Statute.
Prior to the sale of a hospital, DBS attorneys reviewed physician contractual arrangements to ensure compliance with Stark Law. Stark Law Enforcement As is the case with most federal regulatory schemes, the federal government has been vigilant in ferreting out Stark Law violators and severely punishing them as a means of general and specific deterrence.
Given the severity of these penalties, it is critical for all healthcare providers to fully understand which referrals are permitted and which are prohibited under the Stark Law and other federal statutes. Legal counsel who possesses Stark Law experience can be invaluable in preventing violations altogether by reviewing referral practices and providing training to physicians.
And if violations do occur, it is essential to retain healthcare litigation counsel who have experience responding to HHS investigations and dealing with the HHS Inspector General in order to resolve the allegations as expeditiously as possible, and on financial terms that are reasonable and not excessively punitive. The Stark Law vs.