Even in the presence of other legitimate purposes, the courts have interpreted the statute to cover any arrangement where one purpose of the payment or offer of payment albeit not the only purpose was to obtain money for the referral of services or to induce further referrals.
Common technical violations of Stark Law include lack of documentation to support fair market value, failure to accurately describe services rendered and failure to change the terms in writing when compensation or duties change.
In addition, it is often the case that physician owned entities present a lower-cost alternative to the facilities that are located at hospitals. First enacted inCongress strengthened the anti-kickback law in and to ensure that kickbacks masquerading as legitimate transactions did not evade its reach.
Reform proposal[ edit ] The Stark law may impede certain pay for performance value-based arrangements, which led to discussions around reform as of False Claims Act [31 U. It is illegal to submit claims for payment to Medicare or Medicaid that you know, or should have known, are false or fraudulent. 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. What is the Stark Law? Sanctions for violations of the Stark law include the following: Denial of payment — Medicare is prohibited from paying for DHS furnished pursuant to a prohibited referral. Parenteral and enteral nutrients, equipment, and supplies. The federal anti-kickback statute prohibits the knowing and willful offer or receipt of remuneration to induce the referral of business or services covered by a federal health care program, including Medicare. 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. Second, the Stark Law is narrower. But there are fundamental distinctions between the two laws.
As you begin your career, it is crucial to understand these laws not only because following them is the right thing to do, but also because violating them could result in criminal penalties, civil fines, exclusion from the Federal health care programs, or loss of your medical license from your State medical board.
There also is a criminal FCA 18 U. Although these two laws are similar, there are several important distinctions between the Stark Law versus The Anti-Kickback Statute.
Stark Law [42 U.
Stark law penalties
Critics argue that this practice is an inherent conflict of interest , because the physician benefits from the physician's own referral. Some safe harbors address personal services and rental agreements, investments in ambulatory surgical centers, and payments to bona fide employees. In the more than 25 years since its passage, the law has become one of the most significant sources of regulatory burden on physicians and, ultimately, for Medicare beneficiaries. 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. State self-referral prohibitions impose separate restrictions on physician referrals to organizations with which a physician has a financial relationship. Whistle-blowers have a lucrative incentive to pursue these actions, as they are entitled to up to 30 percent of the government's recovery in False Claims Act cases. See the table below to compare the provisions. As payment models evolve, these two complicated laws must be reviewed and adjusted so that risk sharing arrangements can be more easily established.
Understanding the nature of the financial relationship at issue is critical because it determines what, if any, Stark law exceptions are available. Pete Stark, a Democrat from California, who sponsored the initial bill.
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