Physician self-referral laws were introduced in reaction to abuses that were taking place with healthcare transactions in the US. Both the Anti-Kickback Statute and Stark Law were instituted to restrict self-referrals. Violation of these laws may result in criminal or civil penalties. Therefore if you are physician, you should take the time to know the anti-kickback statutes your practice should be aware of.
Under the federal Anti-kickback Statute, it is considered a felony for physicians to pay kickbacks for referrals. Physicians are not allowed to offer, pay, or accept anything of value to induce referrals, or to generate business under the federal health care program. This is applicable to all federal health care programs.
Under the Stark Law, Medicare and Medicaid (Medi-Cal for California), payments are prohibited in cases where a physician refers designated health services (DHS), to an organization with which he/she has a financial relationship. This type of action constitutes self-referral.
There are ten categories of health services that are termed designated, including clinical lab services, radiology and imaging, radiation therapy services, and prosthetics and orthotics.
The financial relationship referred to in the Stark Law may be direct or indirect. Therefore it also applies if the entity, to which the physician makes the referral, is owned by his/her immediate family member.
Several other types of financial relationships with sales personnel, and also with other health care providers, may face scrutiny under the Stark Law and Anti-Kickback Statute. Therefore physicians should consult with a health care attorney about the anti-kickback statues, to ensure that they are not found in breach.
At Nelson Hardiman, LLP, we regularly advise clients on the permissibility of various business transactions under the anti-kickback statutes. Call 310-203-2800 today to speak to an attorney.