Recent Changes to the Stark Law

Kenneth Charette      Mar. 2, 2016

The Centers for Medicare & Medicaid Services (CMS) recently issued final rules that involve several changes and/or clarifications regarding its positions on certain matters relating to the Stark Law. The Stark Law prohibits physicians from making referrals for designated health services payable by Medicare to entities in which the physician has a financial interest, unless the financial relationship meets an applicable exception. Some of the important changes/clarifications to the Stark Law are:

  • Recruitment Exception Related to Non-physician Practitioners. Due to increasing need for primary care non-physician providers (particularly in remote areas), CMS has revised the Stark Law to add an exception that permits remuneration from a hospital (and Federally Qualified Health Centers/Rural Health Clinics) to a physician or physician organization for the purposes of recruiting certain primary care non-physician practitioners into the relevant geographic area. A number of conditions must be met in order for this exception to be available.
  • Changes to Stark Law Exceptions related to “Writing Requirements.” Some of the Stark Law exceptions require that the arrangement be in writing. CMS has now indicated that, depending on the facts and circumstances of a particular case, a collection of documents may be sufficient to satisfy the exceptions which require a written agreement.
  • Updating the Definition of Remuneration. CMS indicated that it does not consider a physician’s use of an entity’s exam rooms, non-physician personnel and/or other supplies when treating patients to constitute “remuneration” under the Stark Law, in situations where the physician bills the payor only for professional fees, and the entity bills the payor for its services (i.e., the entity bills for the “technical component”). However, if one of the parties engages in “global” billing for both the professional and technical components of the services, this practice may implicate the restrictions of the Stark Law.

The Attorneys at Fitzpatrick Lentz & Bubba have extensive experience advising hospitals, practitioners and other healthcare providers on a wide range of healthcare law matters, including regulatory compliance issues. For more information, please contact please contact Kenneth Charette or any other attorney in our Healthcare Group.


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