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As with any business, there are certain laws and regulations put in place that exist solely to protect patrons of those businesses, and medical practices are no exception.
The Anti-Kickback Statute and Stark Law regulations exist to protect patients from situations where medical treatment decisions are made based on the provider’s financial gain.
These kinds of unlawful financial arrangements can lead to providers recommending patients medical services that are not necessary, causing widespread issues like over-utilization of medical services or increased Medicare or Medicaid program costs.
Here’s the full breakdown of everything you need to know about the Anti-Kickback Statute and Stark Law.
Stark Law
Stark Law is a piece of legislation that prohibits healthcare fraud and abuse. The law prohibits physicians from referring patients to receive potentially unnecessary or excessive medical services (ex. clinical laboratory services, physical or occupational therapy services, home health services, outpatient prescriptions) for the purposes of financial gain.
Violating these laws can result in denial or refund of payment for services, costly fines - ranging from $15,000 to $100,000 per violation or attempt to circumvent the legislature.
This practice is also often referred to as “physician self-referral”, which essentially means that physicians are referring healthcare products or services that will benefit them due to a financial relationship they hold.
The Anti-Kickback Statute
The Anti-Kickback Statute is similar to Stark Law in many ways, but it differs in that it encompasses a much wider range of fraudulent activity than Stark Law, as well as a significant amount of proof required to incite legal action against the healthcare provider in question.
Anti-Kickback extends to any medical providers or individuals capable of arranging medical services, and the referrals under this statute include “any item or service for which payment may be made in whole or in part under a Federal health care program.”
Since proof of intent is required to take legal action against a provider who has allegedly made referrals that would benefit them financially, there are also claims classified under the False Claims Act that can be filed to Medicare or Medicaid in a situation where intent cannot be proven, but an infraction has still occurred.
What’s the Difference?
Anti-Kickback Statute
- Applies to all medical providers who could potentially arrange or provide recommendations for medical services
- Referrals that apply under this statute encompass “any item or service for which payment may be made in whole or in part under a Federal health care program”
- Unlawful intent requires proof where a service is recommended “knowingly and willfully” for the purpose of inducing referrals
Stark Law
- Applies only to relationships between physicians
- Prohibits physicians from recommending medical services to patients which would be “Payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship”
- Prohibits a wide range of financial relationships and establishes liability without fault
For more information on Stark Law and some examples that might shock you, check out this blog post!
