What Stark Law Prohibits
The Physician Self-Referral Law, commonly called Stark Law, prohibits a physician from referring Medicare or Medicaid 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. Unlike the Anti-Kickback Statute, Stark Law is a strict liability statute, meaning intent is not required for a violation to occur.
Designated Health Services
Stark Law applies specifically to a defined list of designated health services, including clinical laboratory services, physical therapy, radiology and imaging services, radiation therapy, durable medical equipment, home health services, outpatient prescription drugs, and inpatient and outpatient hospital services, among others.
Key Differences From the Anti-Kickback Statute
- Stark Law applies only to physician referrals for designated health services, while the Anti-Kickback Statute applies broadly to any referral source
- Stark Law is a strict liability civil statute, while the Anti-Kickback Statute is a criminal statute requiring knowing and willful intent
- Stark Law violations can result in denial of payment and civil monetary penalties, while Anti-Kickback violations can result in criminal prosecution
- Stark Law exceptions must be met exactly, while Anti-Kickback safe harbors are voluntary protections
Common Exceptions
Frequently tested exceptions include the in-office ancillary services exception, which allows certain services to be provided within a physician's own practice, and the bona fide employment relationship exception, which protects compensation arrangements between a hospital and an employed physician that meet fair market value and commercial reasonableness standards.
Relevance to HIM Professionals
HIM professionals support Stark Law compliance by maintaining accurate records of referral patterns, ensuring documentation supports the medical necessity and appropriateness of designated health services, and assisting compliance audits that review financial arrangements against referral volume. Because Stark Law violations are often discovered through claims data analysis, coding and billing documentation integrity is directly relevant.
Self-Referral Disclosure Protocol
CMS maintains a Self-Referral Disclosure Protocol allowing providers to self-disclose actual or potential Stark Law violations, which can result in reduced penalties compared to violations discovered through a government investigation.
Exam Strategy
- Focus on distinguishing Stark Law from the Anti-Kickback Statute, since exam questions often test this contrast directly
- Learn the concept of designated health services as the scope-limiting feature of Stark Law
- Understand that strict liability means even an unintentional violation triggers exposure
Key Takeaway
Stark Law is narrower in scope than the Anti-Kickback Statute but stricter in its liability standard, and RHIA candidates should be able to apply both frameworks correctly when analyzing physician financial relationship scenarios.