Operating a hospital can be complicated since you attend to the medical needs of people. Besides this, you are required to observe strict laws, including the Physician Self-Referral Law, commonly referred to as the Stark Law.
This law prohibits physicians from referring patients to facilities they or their immediate family members have a financial relationship with.
This means a physician should not have a financial relationship with your hospital, either in ownership or investment interests. You should also not have compensation arrangements with doctors for referrals.
Here is what you should know about this law:
It covers certain healthcare services
The Stark law applies to “designated healthcare services.” These include clinical laboratory services, physical and occupational therapy services, radiology and certain other imaging services, home healthcare services, durable medical equipment and supplies, outpatient prescription drugs and inpatient and outpatient hospital services, among others.
There are exceptions
The Stark law has some exceptions. And the primary one is when a financial relationship does not result in patient abuse or pose a risk of harm. For example, when a physician refers a patient to a specialty hospital in which they have an ownership or investment interest.
Services within prepaid health plans may also be exempted from this law. Further, a physician can refer patients to a facility they have a bona fide employment relationship with.
You cannot present claims to Medicare
The designated healthcare services mentioned above are payable by Medicare or Medicaid. If a case constitutes a Stark law violation, a hospital cannot present a claim to Medicare or any other third-party payer for the referred services.
Violating the Stark law can be easier than most hospital owners and physicians believe. If you are accused of this offense, get legal guidance to protect your business or career.