Q: I hear a lot of people talk about avoiding possible “Stark Law” violations. Why is that important?
A: The Office of the Inspector General for Health and Human Services notes that Stark is one of the top five things all physicians should know about.1 OIG notes that the Stark Law “prohibits physicians from referring patients to receive ‘designated health services’ payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies. Financial relationships include both ownership/investment interests and compensation arrangements. They also note that this law “… prohibits the … entity from submitting claims to Medicare for those services … .”2 Another name for the Stark Law is the Physician Self-Referral Law,3 so it’s useful to remember that this is about “you referring to you.” It’s found in section 1877 of the Social Security Act [42 U.S.C. § 1395nn].4
Q: What sorts of things should ophthalmologists know about the Stark Law?
A: First, CMS notes that Stark is “… a strict liability statute, which means proof of specific intent to violate the law is not required.” (My emphasis.) Second, you should know that there are some exceptions to running afoul of the Stark Law. One of the exceptions allows “… medical practice[s] to make referrals for in-office ancillary services such as laboratory or radiology services …”5 [these are known as designated health services-]. Third, many states have their own Physician Self Referral regulations, so you should check the rules of your state. (Your state professional societies are good places to ask about this.)
Q: The previous response mentioned that “designated health services” (DHS) can be a potential Stark Law issue. What exactly are DHS and how might they affect ophthalmologists?
A: This particular issue has recently been getting a lot more enforcement attention. The main issue for ophthalmologists who are paid on a productivity-basis, by base pay and/or a bonus, is that they have to exclude certain amounts from some items done routinely in their office if that service appears on the DHS list published by CMS.6 Most often, this is the technical component of these services, but labs are different. Lab tests don’t have a Technical Component/Modifier 26 split and the entire allowed amount is subject to Stark DHS if it appears on the list. The list of DHS services for 2019 includes the following things that are done fairly commonly in eye care (the full list is much longer):
• ultrasound tests: The A- and B-scan tests done in the office (CPT codes 76510-76519);
• OCT tests (CPT 92132, 92133, and 92134);
• tear testing (CPT codes 0330T, 83516, 83861); and
• remote imaging (CPT 92227 and 92228).
The list of codes subject to DHS regulations may change from year to year. It’s usually published for the upcoming year in late November of the preceding year.
Q: What is the Anti-kickback Statute? Does it have the same concerns for me as does the Stark Law?
A: While being in violation of either is certainly bad, the Anti-kickback Statute is much broader in scope than Stark. AKS is not about “you benefitting from referring to yourself” (that’s Stark Law)—it’s about “relationships between entities” in which a financial benefit that might accrue to either party might not be above board. OIG notes “The AKS is a criminal law that prohibits the knowing and willful payment of ‘remuneration’ to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). Remuneration includes anything of value … in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks—those who offer or pay remuneration—as well as the recipients of kickbacks …”1
AKS is not a “strict liability” standard like Stark. To be found guilty of AKS, you have to be proven to have intent (i.e., you are knowingly and willingly in violation).
“The Government does not need to prove patient harm or financial loss to the programs to show that a physician violated the AKS. A physician can be guilty of violating the AKS even if the physician actually rendered the service and the service was medically necessary.”1
Q: Are there penalties under the AKS?
A: Yes, and they can be severe. CMS notes that violators can “face penalties of up to $50,000 per kickback plus three times the amount of the remuneration.” You can even run afoul of AKS and “the Government does not need to prove patient harm or financial loss to the programs to show that a physician violated the AKS. A physician can be guilty of violating the AKS even if the physician actually rendered the service and the service was medically necessary.”1
Importantly, there are some specific, published ways that ensure that you don’t violate AKS; the law refers to these as “safe harbors.” OIG notes1 that “Safe harbors protect certain payment and business practices that could otherwise implicate the AKS from criminal and civil prosecution. To be protected by a safe harbor, an arrangement must fit squarely in the safe harbor and satisfy all of its requirements. Some safe harbors address personal services and rental agreements, investments in ambulatory surgical centers, and payments to bona fide employees.”1 While some practices don’t fit squarely under a safe harbor, they may not rise to the level of enforcement, or are considered low-risk.
Q: How do I find out if I have a potential issue under either Stark Law or the Anti-kickback Statute?
A: If you are concerned in any way about specific referral, legal or financial arrangements that might violate either of these important regulations, get advice from an attorney who is well-versed in this area. It could be money well-spent. REVIEW
Mr. Larson is a senior consultant at the Corcoran Consulting Group. Contact him at firstname.lastname@example.org.
1. OIG. Compliance. Physician Education. A Roadmap for New Physicians. Fraud & Abuse Laws. https://oig.hhs.gov/compliance/physician-education/01laws.asp. Accessed 06/01/19.
2. OIG. Comparison of the Antikickback Statute and Stark Law. https://oig.hhs.gov/compliance/provider-compliance-training/files/StarkandAKSChartHandout508.pdf. Accessed 06/01/19.
3. CMS. Fraud and Abuse. Physician Self Referral. https://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/index.html?redirect=/physicianselfreferral/. Accessed 06/01/19.
4. Social Security Act. Limitation on Certain Physician Referrals. https://www.ssa.gov/OP_Home/ssact/title18/1877.htm. Accessed 06/01/19.
5. Barrett & Singal. The Stark Law. https://barrettsingal.com/services/the-stark-law. Accessed 06/01/19.
6. CMS. Code List for Certain Designated Health Services (DHS). https://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/List_of_Codes.html. Accessed 06/01/19.