Overview of the Stark Law
The Physician Self-Referral Law, commonly known as the Stark Law, prohibits a physician from referring Medicare patients for designated health services to an entity with which the physician or an immediate family member has a financial relationship, unless an exception applies. RHIA candidates should understand that the Stark Law is a civil statute imposing strict liability, meaning intent to violate the law is not required for liability to attach.
Designated Health Services
- Clinical laboratory services
- Physical therapy and occupational therapy services
- Radiology and certain imaging services
- Durable medical equipment
- Inpatient and outpatient hospital services
Understanding this list helps candidates recognize which referral scenarios trigger Stark Law analysis.
Exceptions to the Stark Law
Because financial relationships between physicians and referral entities are common and often legitimate, the Stark Law includes numerous exceptions, such as in-office ancillary services, bona fide employment relationships, and fair market value compensation arrangements that meet specific regulatory criteria. Each exception has detailed requirements that must be fully satisfied.
Consequences of Violation
Violations can result in denial of payment, required refunds of amounts collected, civil monetary penalties, and potential False Claims Act exposure. Unlike the Anti-Kickback Statute, criminal penalties are not imposed under the Stark Law itself.
Compliance Program Implications
Organizations typically require legal review of any financial arrangement with referring physicians to ensure it fits within an applicable exception. HIM and compliance professionals may be involved in auditing physician arrangements and ensuring documentation supports compliance with exception requirements, such as maintaining records demonstrating fair market value compensation.
Self-Disclosure
CMS maintains a voluntary self-referral disclosure protocol allowing organizations that discover a Stark Law violation to self-report and potentially reduce penalties, reflecting the government's interest in encouraging proactive compliance efforts.
Exam Tips
Expect questions testing your ability to identify a designated health service, recognize strict liability as a defining feature of the Stark Law, and distinguish appropriate exceptions from prohibited self-referral arrangements in scenario-based questions.