6 notes on Stark law and its history physicians should know

Here are six things for physicians to know about Stark law:

Why is it referred to as "Stark law"?

Stark law received its nickname from Congressman Pete Stark from California, who sponsored the initial bill.

When was Stark law introduced?

Stark law was first introduced as the Ethics in Patient Referrals Act and was adopted in 1989. It amended Title XVIII of the Social Security Act and prohibited "a physician from referring a patient to an entity for Medicare-covered services or an entity from presenting a claim pursuant to such referral if the physician has a financial interest in, or receives compensation from, such entity."

What are some additional limitations?

Section 1877 of the Social Security Act prohibits physicians from referring Medicare patients for certain designated health services that either the physician themselves or a member of their immediate family has a financial interest in, unless an exception applies.

What are the designated health services?

The designated health services comprise:

  • clinical laboratory services
  • physical therapy, occupational therapy and outpatient speech-language pathology services
  • radiology and certain other imaging services
  • radiation therapy services and supplies
  • durable medical equipment and supplies
  • parenteral and enteral nutrients, equipment and supplies
  • prosthetics, orthotics and prosthetic devices and supplies
  • home health services
  • outpatient prescription drugs
  • inpatient and outpatient hospital services.

Who enforces Stark law?

Stark law is enforced by the Department of Justice, the Centers for Medicare and Medicaid Services and the Department of Health and Human Services.

The ​​Self-Referral Disclosure Protocol, which was introduced in 2010, allows healthcare providers to report potential or existing Stark law violations to CMS. A new group practice information form was added March 1 to physician practices to report noncompliance arising from a failure to fully satisfy the Stark law's onerous definition for a "group practice."

What are some of the updates to Stark law to know?

Stark law was amended Jan. 1, 2022, to clarify and modify methods by which group practice physicians may be compensated. 

Meanwhile, CMS' 2024 Inpatient Prospective Payment System would require physician-owned hospitals to satisfy all Stark law hospital exceptions or rural provider exceptions to qualify for services referred by the physician owner or investor.

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