Physicians who accept Medicare must follow certain rules and standards. If someone does not follow them, it may constitute Medicare fraud, which can result in large financial penalties and possibly a loss of licensure.
The Stark Law is one of the laws that physicians must follow. It is important to understand what it entails so someone does not inadvertently commit fraudulent activity.
Details about the law
According to the Centers for Medicare and Medicaid Services, the Stark Law, officially, is the physician self-referral law. As the name suggests, a doctor may not refer patients for a service or product in which the doctor has financial interests. The law refers to any designated health service such as inpatient or outpatient hospital, physical therapy, labs, speech pathology, radiology, home health and occupational therapy. The law also covers supplies related to medical equipment, prosthetics, parenteral nutrients and outpatient prescription medication.
The government considers it to be fraud if the physician or any immediate family members is an owner or investor of a health service facility for which the referral occurs and Medicare pays. There are certain exceptions to the law, such as when the doctor receives necessary non-monetary compensation or for services related to preventive screening tests.
Penalties for breaking the law
According to the Office of Inspector General U.S. Department of Health and Human Services, there is no requirement that the government must prove specific intent for law violation, as it is a strict liability statute. Penalties for fraud conviction include fines, and the doctor may not continue to participate in any health care programs of the Federal government.