Also known as the “Stark Law,” physician self-referral is a type of health care fraud that a physician may run into when he or she or a family member has a vested interest in another designated health service (DHS). It prohibits a physician from making referrals to these conflicting entities and violations can result in civil money and other penalties.
The Three Points of the Physician Self-Referral Law
The purpose of this law is to prevent a physician from making referrals based upon self-interest rather than the patent’s best interest. When first introduced in 1989 the law only applied to physician referrals to clinical laboratory services. Over the years, Congress has expanded the restrictions to include more designated health services and applied much of the law to the Medicaid program.
Currently, Section 1877 of the Social Security Act prohibits a physician from referring patients to certain DHS that are payable by Medicare to an entity with which he/she, or an immediate family member has a financial relationship unless certain exceptions apply. A financial relationship is considered ownership, investment, or compensation from a DHS provider.
The second point of the physician self-referral law is that the DHS provider cannot present a claim or cause a claim to be presented to Medicare for the referred service. This also applies to billing another individual, entity or third party payer.
The final point of the law is to establish specific exceptions to financial relationships that do not pose a risk of Medicare program or patient abuse. It also grants the Secretary of Health & Human Services the authority to create the necessary regulatory exceptions to protect these exempt relationships.
Protecting Your Practice from Physician Self-Referral Health Care Fraud
As part of the Patient Protection and Affordable Care Act, the Center for Medicare & Medicaid Services helped establish the Medicare self-referral disclosure protocol (SRDP). This protocol created a process for providers of services and suppliers to self-disclose violations – actual and potential – of the physician self-referral law. By doing so, service providers or suppliers may be able to reduce monetary penalties levied against them for violations of the self-referral law.
Physicians must take action in their own practice to ensure they are not breaching any of the law. This means maintaining records of your and immediate family members’ financial connections to the following designated health services:
• clinical laboratory services;
• physical therapy services;
• occupational therapy services;
• outpatient speech-language pathology services;
• radiology and certain other imaging services;
• radiation therapy services and supplies;
• durable medical equipment and supplies;
• parenteral and enteral nutrients, equipment, and supplies;
• prosthetics, orthotics, and prosthetic devices and supplies;
• home health services;
• outpatient prescription drugs; and
• inpatient and outpatient hospital services.
Don’t Face Health Care Fraud Charges Alone
Attorney Robert Malove helps the health care community of Florida address accusations and charges of Medicare and health care fraud. If your practice or business is in jeopardy, contact our office at 954-861-0384 to schedule a consultation regarding your rights.