Stark Law - Physician Contract Glossary

Stark Law

Definition

A federal law prohibiting physicians from referring Medicare or Medicaid patients for certain health services to an entity in which they (or immediate family members) have a financial interest unless an exception applies.

Examples in Context

“All physician referrals for diagnostic imaging services must comply with the Stark Law exception for in-office ancillary services.”

“Physician agrees not to refer Medicare patients to any entity in which they have an ownership interest unless documented Stark Law compliance is met.”

Implications for Physicians

• Limits your ability to refer patients to practices, labs, or facilities you partially own.
• Non-compliance can lead to fines, recouped Medicare payments, or exclusion from federal healthcare programs.

Negotiation Tips

• Ensure all financial arrangements meet a Stark Law exception.
• Ask your employer to provide written confirmation that arrangements comply with Stark Law.
• Consult a healthcare attorney if your contract involves investment or referral arrangements.

Red Flags and Pitfalls

• Employers that pressure you to refer to owned services without proper Stark Law safeguards.
• Unclear contract language that fails to specify which exceptions apply.
• Referral expectations tied to bonus structures that violate Stark Law.

Related Terms

• Anti-Kickback Statute
• Fair Market Value
• Stark Law Safe Harbor

FAQs

• “What services does Stark Law apply to?”
  • Stark Law regulates referrals for designated health services (DHS) such as imaging, laboratory services, and physical therapy.
• “Does Stark Law apply to non-Medicare patients?”
  • No, Stark Law specifically governs referrals involving Medicare or Medicaid payors. However, some states have similar laws that apply to all patients.
• “What penalties can result from Stark Law violations?”
  • Penalties can include repayment of claims, fines of up to $15,000 per service, and exclusion from Medicare and Medicaid.

Legal Disclaimer

The information provided in this glossary is for educational and informational purposes only and should not be construed as legal advice. While we strive to provide accurate and up-to-date information, this content is intended to help physicians better understand common contract terms and does not replace professional legal guidance.

For personalized advice regarding your employment contract or other legal concerns, we strongly recommend consulting with a qualified attorney who specializes in physician employment contracts.

You can find experienced legal professionals through our Physician Contract Lawyer Directory.