The First Steps to Understanding Stark Law

The First Steps to Understanding Stark Law

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In today’s video, we will be introducing you to Stark Law.

We do so much legal work for our clients related to Stark Law as it’s one of the centerpieces of healthcare regulatory law in the United States. So if you’re a healthcare practitioner or business and you’re not familiar with Stark yet, it’s high time to get acquainted.

My name is Michael H. Cohen and I’m founding attorney of the Cohen Healthcare Law Group.

I’m going to explain three top-level facts you have to keep in mind about Stark Law in order to understand Stark and how it could impact your health and wellness business. By the end of this video, you’ll know enough about Stark to begin asking yourself key questions about the legal risks you might be facing.

We’ve advised over a thousand clients on similar healthcare and FDA legal issues.

First, remember that Stark Law is not a single law. Stark Law is a set of laws beginning in the early 1990s and named after its initial sponsor, former U.S. Representative Pete Stark of California, a Democrat representing a Bay Area district.

The core idea of Stark Law is that doctors should provide the best services to their patient by referring them to the best quality health care provider. To that end, Stark Law regulates the way that medical practitioners are allowed to make referrals in order to keep practitioners from making referrals when they have a financial interest at stake.

Secondly, you have to understand the definitions that Stark Law uses. Stark forbids doctors from referring Medicaid or Medicare patients to businesses called designated health service (DHSs) if certain conditions exist. So we have to know how Stark uses those terms, referral and DHS.

A referral includes:

  • Any request for a medical service or item or good payable under Medicare Part B Consultation requests
  • Any services authorized due to the consult request; and
  • A treatment course the DHS provides

And a DHS can be:

  • A  practice  used  to  provide  laboratory  tests,  outpatient  prescription  drugs,  imaging  tests,  and physical therapy or work-related therapy.
  • A practice that provides medical equipment
  • A home health service or hospital service

Finally, remember that even though Stark Law forbids referrals to a DHS if the practitioner has financial interests in the DHS, it also makes some exceptions.  One of the biggest exceptions is physician services.  These are approved medical services performed (or supervised) by a doctor who is in the referrer’s “group practice.”

Another exception is in-house ancillary services. Under this exception, referrals may be acceptable if the person who performs the services is:

  • The doctor himself (or herself)
  • Someone in the referring doctor’s group practice
  • Someone supervised by a doctor in that group practice

Thanks for watching. Here’s to the success of your healthcare venture, we look forward to speaking with you soon.


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