The Stark Law, which deals with financial management within health care organizations was discussed in Weeks 3-4. Stark Law (also known as Physician Self-Referral Law) is a federal law which prohibits doctors from referring patients into entities that have financial interests in certain health services. The law was enacted to prevent financial conflicts of interest and to ensure that referrals are made solely on the basis of the patient’s best interests.
The Stark Law defines health services as clinical laboratory services and occupational therapy. They also include durable medical equipment. Physicians who have a financial relationship or business dealings with entities that provide designated services are prohibited from referring patients.
There are several exceptions from the Stark Law. The in-office ancillary service exception allows doctors to offer certain health services within their offices. And the bona fide employer exception allows them to refer patients to employers.
Stark Law violations can result in serious penalties. These include fines, exclusions from federal health programs and possible liability under the False Claims Act. Therefore, it is important for health care organizations to ensure that their financial relationships with physicians comply with the law and that referrals are made solely on the basis of the patient’s best interests.