Stark Law / Anti-Kickback / Fraud and Abuse Lawyers (2023)

  • experience
  • overview
  • frequently asked Questions
  • External Sources
  • Contact
  • Article
  • Rode

In doing business, healthcare providers must comply with many complicated regulations, such as: These include the federal ban on physician self-referral (commonly known as the Stark Act), the state anti-bribery law, and a variety of state fraud and abuse laws that do not reflect federal regulations. Healthcare companies may be further constrained by company practice drug bans, fee-sharing prohibitions, reporting requirements, eligibility requirements or Medicare certification requirements and billing rules (such as anti-markup). At Wachler & Associates, we've been helping vendors navigate these difficult areas of the law for over 25 years. We have conducted Stark and other regulatory reviews for many types of providers, including group practices, hospitals, hospital-physician organizations, physician organizations, physician-owned dealers, equipment leasing companies, and diagnostic testing facilities, to name a few. Whatever your healthcare endeavor, our attorneys can help you identify potential regulatory pitfalls so you can plan your business in compliance with healthcare fraud and abuse laws, such as the Stark Regulations and the Anti-Bribery Statute being able to lead.

come back up

Summary of Stark's Law

The Physician Self-Referral Prohibition, commonly known as the Stark Act, is a complex body of legislation that has expanded steadily since it was first published in 1995. Back then, Stark only applied to clinical laboratory performance. Stark now applies to a large number of services (referred to as “Designated Health Services” or “DHS”), as well as virtually every financial relationship between a physician and the facility that performs or bills for DHS. In summary, physicians are prohibited from transferring DHS payable by Medicare or Medicaid to an entity with which the physician (or an immediate family member) has a financial relationship, unless an exception is made. Failure to make an exception will result in severe penalties, including refusal to pay, refund of payment, a $15,000 civil fine per service, and a $100,000 civil fine for each settlement found to be fraudulent.

Our experienced healthcare attorneys can help you assess whether Stark's law applies to your relationships and whether an exception is possible. If an exception is available, we can help structure your contracts, procedures, and policies to be Stark compliant. We encourage you to review this review at least annually (if not more often) to ensure that your relationships, the DHS you operate, and the law have not changed in a way that prevents you from complying.

Anti-Corruption Law and Related Laws

Most situations that may involve Stark laws must also be discussed in accordance with the Anti-Corruption Act and other public health regulations. The Anti-Bribery Act provides criminal sanctions for any person or entity that knowingly and knowingly offers, pays, requests, or receives compensation in order to effect business payable by Medicare or Medicaid. Violating the anti-corruption law can result in a fine of up to $25,000, imprisonment for up to five years, or both. Violation can also result in disqualification from the Medicare program.

There are many other laws, both federal and state, that create potential liability for healthcare providers and other healthcare companies, including state anti-corruption laws, state bans on self-referencing (similar to Stark's federal regulations, but often applicable to all forms of payers) . 🇧🇷 Businesses and healthcare providers should also be aware of corporate drug ban practices in place in many states and the specific Medicare rules that apply to different types of providers. Some examples of Medicare rules that can cause problems for healthcare companies include the anti-markup rule, multi-facility eligibility requirements, and performance, licensing, or certification standards.

Whether you are dealing with these questions during your business planning or have a specific concern, our experienced attorneys can help you understand and comply with these many complicated health regulations.

come back up

(Video) Healthcare Fraud & Abuse (Stark Law, Anti-Kickback, etc.)

Frequently Asked Questions

Click here for a list of FAQs about Stark and other fraud and abuse issueshere.

come back up

External Sources

For more information, see the CMS overviewhere.

For information on the Anti-Corruption Act and the opinions of the HHS OIG, go to:

come back up


If you have any questions about Stark, the Anti-Kickback Statute, the Anti-Markup Rule, or related topics, please contact usandres wachler248-544-0888 or through ourWebsite-Web.

come back up

(Video) Stark, Anti-Kickback Statute, and Other Fraud and Abuse Laws

ArticleOur attorneys have written extensively on Stark and related matters. For a full list of our subscription items, clickhere.

come back up

RodeAttorneys for Wachler & Associates have spoken frequently on Stark and related matters. Click here for a complete list of Wachler & Associates conferenceshere.

come back up

Manifest/Fraud and Abuse Related FAQsWhat exactly does Stark forbid?

In summary, physicians are prohibited from diverting DHS payable by Medicare or Medicaid to an entity with which the physician has a financial relationship, unless an exception is made.

What are the penalties for injuring Stark?

Penalties for injuring Stark can be severe. These include refusing to pay, refunding payment, imposing a $15,000 fine per service, and imposing a $100,000 fine for any settlement found to be an evasion scheme.

Who does Stark qualify as a "medical" matter?

The final regulations of Phase I define “physician” as a medical doctor or osteopath, a doctor in dental surgery or dentistry, a doctor in podiatry, a doctor in optometry or a chiropractor.

(Video) Stark vs Anti-Kickback: The Key Differences

Who is considered an "immediate family member" under Stark?

The term "immediate family member" is broadly defined to refer to a husband or wife; biological or adoptive parent, child or sibling; stepfather, stepson, half-brother or half-sister; father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law; grandfather or grandson; and spouse of a grandparent or grandchild.

What is DHS?

The term DHS refers to Designated Health Services. These are certain services (including certain types of equipment, consumables and medicines) to which the prohibition on medical self-referral applies. The following items or services are DHS:

  1. clinical laboratory services.
  2. physiotherapy services.
  3. occupational therapy services.
  4. Outpatient speech therapy.
  5. Radiology and some other imaging services.
  6. Radiation therapy services and supplies.
  7. Durable medical devices and consumables.
  8. Parenteral and enteral nutrients, devices and accessories.
  9. Prostheses, orthoses and prosthetic devices and accessories.
  10. Family Medical Services.
  11. Outpatient Medication.
  12. hospital and outpatient care.

CMS publishes a list of CPT codes that qualify as DHS to help vendors comply with Stark. This list is availablehere.

What constitutes a "reference" for purposes of Stark banishment?

Stark defines "referral" broadly as including a doctor's request for an item or service paid for by Medicare or Medicaid (including a doctor's request to see another doctor and any tests or procedures performed by that doctor ordered or performed by another physician) or a request from a physician to create a treatment plan that includes the provision of a DHS. The definition of "referral" does not include services performed by a referring/referring physician personally (but excludes services performed by staff or other members of the same practice group as the referring physician). This allows physicians who personally fulfill DHS prescriptions for their patients to structure agreements without worrying about possible violations by Stark.

What constitutes a "financial relationship" for Stark's purposes?

A “financial relationship” is defined as direct or indirect ownership or interest in a company through equity, debt or other means, or a direct or indirect compensation arrangement with a company.

What exceptions are there?

(Video) Anti Kickback Law and Stark Law Explained

There are numerous exceptions to Stark including the Office Ancillary Services Exception, the Hospital-Wide Exception (which was significantly affected by the Affordable Care Act), the Bona Fide Employment Exception and more. Each exception has a set of elements that must be exactly true for the exception to be true. Failure to meet any of these elements constitutes a violation of Stark Law. This means that if the provider is accepting referrals from a physician with whom they have a financial relationship, it is extremely important for providers to seek help in reviewing and understanding all aspects of the exception.

Does Stark require that patients be notified when a physician has a financial relationship with a provider?

If a physician prescribes certain diagnostic tests (MRI, CT, and PET) under the Office Benefits Exception, the physician must notify the patient in writing at the time of referral. This notice must clearly state that the patient is under no obligation to receive these services at the facility that has a financial relationship with the physician. The notice must also list at least five facilities within a 25-mile radius of the office. If there are fewer than five vendors within the 25 mile radius, you must list all vendors within the radius and provide the vendor's name, address, and phone number. The list cannot include hospitals as one of the five facilities, but it can list hospitals in addition to the five facilities.

Is there a process to clarify if a fix falls outside of the Stark ban or encounters an exception to the ban?

CMS has established a consultative process whereby parties to an agreement may obtain a written determination from CMS as to whether the agreement constitutes a “financial relationship” under Stark II and whether the agreement satisfies an exception.

If I violated Stark, what are my options?

The Affordable Care Act amended federal law to require anyone who has received an overpayment to report and repay the overpayment and to notify the facility to which the overpayment was repaid in writing of the reason for the overpayment. The overpayment must be reported and refunded within 60 days of the determination of the overpayment or the due date of the applicable expense report, if applicable.

A company that withholds an overpayment after this window may be liable under the False Claims Act (31 U.S.C. §3729). This can result in large fines, treble damages, and disqualification from federal and state health programs.

Instead of refunding the full overpayment, the Centers for Medicare and Medicaid Services ("CMS") also issued a Medicare Self-Referral Disclosure Protocol, as required by the Affordable Care Act. Under this protocol, vendors can disclose Stark violations and CMS can reduce the amount owed for the violation.

come back up

(Video) Fraud and Abuse:Anti-Kickback Statute


Are the Federal Anti-kickback law and the Stark law exactly the same Explain your answer? ›

The Stark Law applies only to referrals from physicians and certain itemized services to be paid by Medicare and Medicaid. The Anti-Kickback Statute applies to any referral regarding any expenditure that any federal government healthcare program will pay for.

What 5 elements must exist for a Stark law violation to occur? ›

In order for a relationship to implicate Stark, five basic elements must be present: (1) a physician must make (2) a referral for the furnishing of (3) designated health services payable by Medicare (4) to an entity (5) with which he/she (or an immediate family member) has a financial relationship.

What are exceptions to the Stark Act? ›

Certain outpatient prescription drugs identified on HCFA's website (updated annually) that are EPO and other dialysis-related drugs and are administered in or by an ESRD facility are exceptions to the Stark law prohibition.

Which of the following is an example of a Stark law violation? ›

An example of a Stark law violation is a hospital paying doctors money to refer cardiac patients to their hospital. Similarly, it is a violation of Stark for a laboratory or outpatient clinic to pay hospitals to refer patients to them.

What is the Stark Law for dummies? ›

The Physician Self-Referral Law, commonly referred to as the Stark law, prohibits physicians from referring patients to receive "designated health services" payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies.

What are the major differences between the Anti kickback Act and the Stark Law? ›

The Anti-Kickback Law covers referrals for all services from anyone including physicians or pharmaceutical companies. Conversely, the Stark Law is for referrals from physicians only and covers a set list of “Designated Health Services” (DHS).

What is an example of a violation of the Anti-Kickback Statute? ›

Examples of prohibited kickbacks include receiving financial incentives for referrals, free or very low rent for office space, or excessive compensation for medical directorships. Other kickbacks include waving copayments, either routinely or on a selective case-by-case basis.

What is Stark Law compensation? ›

The Stark Law now allows profits from designated health services that are directly attributable to a physician's participation in a value-based enterprise to be distributed to that physician; this compensation will not be deemed to directly relate to the volume or value of the physician's referrals. See C.F.R.

What are technical violations of Stark Law? ›

Technical violations or noncompliance, including documentation issues. Forgetting to sign a contact or allowing a contract to expire without renewal. Accidentally omitting elements of a legal exception from agreements. Failure to conduct business in accordance with the written agreement.

Is Stark Law strict liability? ›

The Stark Law is often referred to as a “strict liability” law, because even an unintentional violation triggers the prohibition on Medicare payment. Noncompliance over a long period of time can result in large overpayment liability.

Which of these is one of the three main parts of the Stark Law? ›

Three main concepts of Stark's ban on physician self-referral include: (1) physician referral; (2) DHS; and (3) financial interest. All three concepts must be implicated in order for Stark to apply to a given situation.

How can the violation of Stark Law be prevented? ›

To protect your organization against Stark law violations, you must ask newly-hired physicians to report any potential conflicts of interest. Physicians should complete a conflict of interest questionnaire upon hiring and then again at least once a year thereafter.

Who is primarily responsible for enforcement of the Stark law? ›

The department of justice, CMS, and the department of health and human services oversees the enforcement of the Stark law.

What is an example of a violation of the False Claims Act? ›

31 U.S.C. 3729(b). In sum, the False Claims Act imposes liability on any person who submits a claim to the federal government that he or she knows (or should know) is false. An example may be a physician who submits a bill to Medicare for medical services she knows she has not provided.

What are examples of violation of the law? ›

Universally, mala in se crimes (translated: 'evil in itself,' or 'intrinsically bad') are regarded as violations of the law in all nations. These roughly correspond to violent felony crimes: homicide, rape, robbery, and assault.

What is the importance of the Stark Law? ›

The Stark Law guides physicians to practice their profession with integrity. It allows you to avoid incurring fines by steering clear of unlawful self-referrals in the medical industry. It's vital to develop a comprehensive understanding of the Stark Law.

In what situation is a written agreement not required under Stark? ›

Unlike independent contractor arrangements, employment contracts are not required to be written; the compensation need not be set in advance; and the compensation may be amended at any time.

Is the Stark Law outdated? ›

Since the Stark Law was enacted in 1989, the regulations implementing it have become woefully outdated. Too often, they have hindered, rather than advanced, the cause of affordable, quality health care for patients.

What is the Anti-Kickback Statute for dummies? ›

The AKS is a federal criminal law. It prohibits offering or accepting kickbacks to generate health care business. As a result, violation of the AKS is a felony, punishable by ten years in jail and fines of $100,000 per violation.

What poor practices is eliminated by the Anti-Kickback Statute? ›

The Anti-Kickback Statute and Stark Law prohibit medical providers from paying or receiving kickbacks, remuneration, or anything of value in exchange for referrals of patients who will receive treatment paid for by government healthcare programs such as Medicare and Medicaid, and from entering into certain kinds of ...

What is the federal Anti-kickback? ›

The federal Anti-Kickback Statute (AKS) (See 42 U.S.C. § 1320a-7b.) is a criminal statute that prohibits the exchange (or offer to exchange), of anything of value, in an effort to induce (or reward) the referral of business reimbursable by federal health care programs.

How does federal law define kickbacks? ›

A "kickback" is a term used to refer to a misappropriation of funds that enriches a person of power or influence who uses the power or influence to make a different individual, organization, or company richer. Often, kickbacks result from a corrupt bidding scheme.

Does Stark Law protect whistleblowers? ›

The government and whistleblowers can bring False Claims Act lawsuits against physicians and health care providers, such as hospitals, that violate the Stark Law. The False Claims Act provides a way for the government to collect the money it paid for claims submitted in violation of the Stark Law.

What has been added as an exception to the Anti-Kickback Statute and Stark Law? ›

Cybersecurity Exception.

The Final Rule creates a new exception that permits the donation of technology and services that are necessary and used predominantly to implement, maintain, or reestablish cybersecurity if certain conditions are met.

How do you avoid Stark law? ›

To protect your organization against Stark law violations, you must ask newly-hired physicians to report any potential conflicts of interest. Physicians should complete a conflict of interest questionnaire upon hiring and then again at least once a year thereafter.

What items are considered kickbacks? ›

Generally, a kickback is an illegal payment or transfer of something of value in exchange for receiving preferential treatment for the goods or services provided by the person providing the bribe. These can take many forms including cash payments, gifts, inflated bills, or anything which has inherent value.

What type of crime is a kickback? ›

Key Takeaways. A kickback is an illegal payment intended as compensation for preferential treatment or any other type of improper services received. Kickbacks are often referred to as a type of bribery. While kickbacks can take many different forms, they all feature some sort of collusion between two parties.

How do you prove kickbacks? ›

Detection of Bribery and Kickback Schemes

Compare prices paid for goods and services to market rates. Analyze purchase levels by vendor. Analyze inventory overstocks and shortages. Identify continued purchases of inferior-quality goods.

What are examples of illegal kickback? ›

Basically, anything of value to a person in a position to refer, such as cheap office space, patients referrals, a free employee, or a fat bonus, can classify as an illegal inducement under the Anti-Kickback and Stark laws.

What is the policy justification for the anti-kickback law? ›

FEDERAL ANTI-KICKBACK LAW AND REGULATORY SAFE HARBORS. Overview: On the books since 1972, the federal anti-kickback law's main purpose is to protect patients and the federal health care programs from fraud and abuse by curtailing the corrupting influence of money on health care decisions.

Do whistleblowers Need evidence? ›

A whistleblower need not have witnessed the challenged fraud or misconduct but he or she must have concrete and specific evidence of the fraud. Mere suspicion or belief is not enough. Being able to identify the “who, what, where, when, why and how” of the challenged fraud or misconduct is most helpful.

Do whistleblowers get in trouble? ›

Known as The False Claims Act, the law protects whistleblowers from retaliation. It is illegal for you to be discharged, demoted, suspended, threatened, harassed, or in any other way discriminated against for filing a qui tam claim.

Who enforces whistleblower protection? ›

OSHA's Whistleblower Protection Program enforces the provisions of more than 20 federal laws protecting employees from retaliation for, among other things, raising or reporting concerns about hazards or violations of various workplace safety and health, aviation safety, commercial motor carrier, consumer product, ...

What is the final rule of Stark anti kickback? ›

The Final Rule of the Stark Law revises the definitions of Fair Market Value and includes a definition of General Market Value to better align with actual practices without unduly restricting innovative relationships between physicians and entities providing designated health services.

What is the safe harbor exception to Stark Law? ›

This safe harbor requires no assumption of downside risk by parties to a value-based arrangement. The Stark Value-Based Arrangements exception protects physician compensation arrangements that qualify as value-based arrangements, regardless of the level of risk undertaken though the arrangement.

What are the exceptions to the Stark Law 35? ›

Vaccines, immunizations, and screening tests are generally allowable Stark exceptions provided they aren't given too often. The tests must be covered by Medicare. Intra-family rural referrals. Additionally, some referrals in rural areas are allowed if the services are for an immediate family member.


1. Fraud and Abuse Laws: False Claims, Stark, Anti Kickback Statute, and Civil Monetary Penalties Law
(Holland & Hart LLP)
2. Final Stark and Anti-Kickback Statute Rules: What You Need to Know
(Dorsey & Whitney LLP)
3. What is the Stark Law Recruitment Exception?
(Chelle Law)
4. HHS Proposed Changes to Anti-Kickback Statute and Stark Law
5. Fraud and Abuse: Stark
(Holland & Hart LLP)
6. Stark vs Anti-Kickback vs Fee-Splitting
(Cohen Healthcare Law Group)
Top Articles
Latest Posts
Article information

Author: Rev. Porsche Oberbrunner

Last Updated: 04/29/2023

Views: 6011

Rating: 4.2 / 5 (73 voted)

Reviews: 88% of readers found this page helpful

Author information

Name: Rev. Porsche Oberbrunner

Birthday: 1994-06-25

Address: Suite 153 582 Lubowitz Walks, Port Alfredoborough, IN 72879-2838

Phone: +128413562823324

Job: IT Strategist

Hobby: Video gaming, Basketball, Web surfing, Book restoration, Jogging, Shooting, Fishing

Introduction: My name is Rev. Porsche Oberbrunner, I am a zany, graceful, talented, witty, determined, shiny, enchanting person who loves writing and wants to share my knowledge and understanding with you.