Stark Law: Ethics In Patient Referrals Act

The Stark Law was first introduced as the Ethics in Patient Referrals Act of 1989 and amended in 1993; since then, the Stark Law has been modified and separated into three distinct phases of regulations. Several services fall under the Stark Law commonly referred to as designated health services (DHS), under these regulations by the Centers for Medicare and Medicaid, the Stark Law forbids a physician from referring patients to themselves or any health care organization of a family member. The Stark Law is intended to limit medical services ordered by a doctor, in efforts of controlling healthcare expenditures. The Stark Law was implemented to prohibit physicians from performing medical procedures that are not required, using financial motives

to complete services and to prevent fraudulent acts with Medicare and Medicaid claims. There are several services categorized as DHS including “clinical laboratory services; physical therapy services; occupational therapy services; radiology services; radiation therapy services and supplies; durable medical equipment and supplies; parental and enteral nutrients; equipment and supplies; prosthetics, orthotics, and prosthetic devices and supplies; home health services; outpatient prescription drugs; inpatient hospital services; and outpatient hospital services” (Wool, Barrett, 2015; pg. 40.) Although the Stark Law prohibits a physician from self-referring a patient, under the Stark Law, it is permissible for the referring physician to perform test they have ordered.

There are five principles of a Stark Violation which include a physician’s involvement, a referral must be submitted, the referral must be associated with a designated health service (DHS) for Medicare or Medicaid, a physician or a family member must have a financial relationship with the entity, the Stark Law does not apply if the statute's coverage covers the referral or body.