Health Law

Physicians Need to Make Sure Their Stark Arrangements Are In Order ASAP

By Todd A. Rodriguez

Physicians, Do you have financial relationships (think joint venture, medical director stipends, lease arrangements, AS&T agreements) with a hospital? If so, your referrals to that hospital for inpatient and outpatient services may violate the federal Stark self referral law unless they fall within one of the exceptions to Stark.  You need to make sure your arrangements meet an exception!  Even if you originally structured those arrangements to fit within a Stark exception, if you have not reviewed those arrangements for Stark compliance for awhile, I strongly recommend that you review your arrangements for compliance now. 

Why the urgency? Because in the coming months, CMS will be auditing hospital/physician financial relationships for compliance with Stark. Specifically, CMS will be sending out “Disclosure of Financial Relationship” information requests to 500 hospitals across the Country soliciting specific information about the relationships the hospitals have with their physicians.  If yours is one of those hospitals, CMS will be looking at your arrangements.    

What should you be looking for? You need to identify your hospital financial relationships and then figure out which exception applies. If you have a contract, you need to be sure the contract meets the specific requirements of the applicable exception and that it is signed and currently in effect.  Remember, Stark is a strict liability statute so if you don’t meet all of the requirements of an exception, you likely have a violation of the statute and the penalties are draconian.

What if you’re not compliant? The Stark regulations do offer some ability to correct non-compliant arrangements but they are very limited. Generally a refund is required and penalties for violating Stark include a $15,000 civil money penalty for each tainted referral and for each claim submitted pursuant to a tainted referral, as well as potential false claims liability.

If you’d like assistance evaluating your hospital relationships for compliance with Stark (or handling non-compliant arrangements), please contact Todd Rodriguez.

Full post as published by Physician Law on October 14, 2008 (boomark / email).