The Stark Law - An Overview

The regulations known as the Stark Law were designed to prevent physicians from referring patients to entities with which they have an existing relationship and stand to benefit financially. The law applies specifically to designated health services (DHS) that are paid by Medicare (or any other Federal program). The purpose of the law is to reduce Medicare fraud where physicians were being compensated – either directly or indirectly – for the referral of patients to specific providers.

The intent of this course was to provide a high-level overview of the Stark law. Business arrangements permitted under the Stark law may nevertheless be subject to enforcement under other laws. State self-referral prohibitions impose separate restrictions on physician referrals to organizations with which a physician has a financial relationship. Given the strict liability nature of the Stark Law, physicians should not proceed without an evaluation of any proposed arrangement with a DHS entity by competent legal counsel.