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Stark Law/Physician Issues

Health care is a highly regulated industry, and for physicians in particular, it is imperative that they structure their business dealings to be compliant with many laws, none the least are the Stark Law and the Anti-Kickback Statute. Doctors should seek the advice and counsel of an experienced health care attorney in Donna J. Craig, RN, JD, a nurse attorney, when it comes to analyzing the business deals, to make sure they are in compliance with federal and Michigan laws.

The Health Law CenterStark Law – The Stark Law defines “physician” as a medical doctor, osteopathic doctor, doctor of dental medicine or surgery, podiatrist, optometrist, and chiropractor. For these doctors, the Stark Law, or the federal law on the prohibition of self-referrals, prohibits a physician from referring a Medicare or Medicaid patient to an entity (i.e. hospital) for Designated Health Services (“DHS”) when the doctor or a member of his/her immediate family has a financial relationship with the entity, unless a statutory exception is met. If the arrangement does not fall into a Stark Law exception, payment for such DHS services will be denied and severe penalties may apply.

When the Stark Law was first passed DHS was limited to clinical laboratory services. Over the years additional DHS categories have been added, including the following: physical therapy services; occupational therapy and speech pathology services; radiology and certain other imaging services; radiation therapy and supplies; durable medical equipment (“DME”) and supplies; parenteral and enteral nutrients, equipment and supplies; prosthetics, orthotics and prosthetic devices and supplies; home health services; outpatient prescription drugs; and inpatient/outpatient hospital services.

Anti-Kickback Statute – The Anti-Kickback Statute, also known as the Fraud & Abuse Law prohibits anyone (not limited to physicians) from giving, accepting, soliciting (i.e. asking for or arranging items of value in any form such as gifts or cross-referrals between parties) either directly or indirectly, for the purpose of inducing or rewarding another party for referrals of services paid by Medicare or Medicaid. This is a criminal statute which if violated can result in fines, imprisonment or exclusion from the Medicare program. To avoid a violation of the Anti-Kickback Statute, the law sets forth certain “safe harbors”, which if complied with shield the individual or entity from sanctions. If an arrangement does not fit into the four walls of a safe harbor, it does not necessarily make the arrangement illegal. This is where an experienced nurse attorney like Donna J. Craig, RN, JD can analyze particular situations and advise clients accordingly.

The Health Law CenterEmployment and Independent Contractor Agreements – The Stark Law and the Anti-Kickback Statute have respective exceptions and safe harbors, which must be analyzed whenever a doctor is entering into an employment or independent contractor arrangement to provide professional services on behalf of an entity. It is critical that physicians receive counseling from a qualifed attorney whenever entering into such arrangements. Other arrangements may trigger a Stark Law and/or Anti-Kickback Statute analysis, so it is always important that a physician and other providers check with an experienced health care attorney before entering into business arrangements.

Space and Equipment Leasing and Timeshare Arrangements – It is not uncommon for a doctor to lease office space from a hospital or other provider, or lease equipment to be used in his/her office space. In such situations, whenever a doctor is entering into an office lease or timeshare arrangement, or wishing to lease equipment, the Stark Law and Anti-Kickback Statute must be analyzed to ensure the doctor’s arrangement is compliant with these laws. It is always important for a doctor to check with a qualified health law attorney before proceeding.

If you are a physician who wishes to enter into various business arrangements, get the advice of a qualifed health law attorney before proceeding by contacting The Health Law Center at donna@healthlawcenterplc.com.