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The Stark Law: a potential landmine for Texas doctors

A medical provider must have skilled and knowledgeable legal counsel on its side to safely navigate the minefield of laws and regulations to which the medical profession is subjected, including the Stark Law.
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    January 01, 2014 /24-7PressRelease/ -- The Stark Law: a potential landmine for Texas doctors

Article provided by JP Spiers PLLC
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Some people might say that the relationship between doctors and lawyers is one of love-hate. Some attorneys file lawsuits against physicians for medical malpractice, for example; but lawyers also defend doctors against those negligence claims.

At other times, a medical provider must have skilled and knowledgeable legal counsel on its side to safely navigate the minefield of laws and regulations to which the medical profession is subjected.

Federal physician self-referral law

One of the main areas in which physicians need solid and ongoing legal advice is to help them comply with the federal physician self-referral law, also known as the Stark Law. Part of the Social Security Act, the Stark statute is many pages long and extremely detailed. Many federal regulations have also been enacted to carry out the self-referral law.

In basic terms, the Stark Law says that a physician may not refer a Medicare or Medicaid patient for a "designated health service" or DHS to another medical entity in which the referring doctor or his or her immediate family member has a financial interest. The law is intended to prevent doctors from making referrals in their own financial self-interest, rather than in the best interest of patients.

Designated health services

Services or DHSs covered by the Stark Law are specifically listed in the statute and are quite broad, but do not reach every medical service. Some of the included DHSs include:
-Clinical lab services
-Physical and occupational therapy
-Radiology and radiation therapy
-Durable medical equipment
-Home health services
-And several more

Prohibited referrals and exceptions

The types of financial interests a referring doctor may not have in the referred-to entity are specifically delineated by the law. Even what constitutes a "referral" can require a legal analysis.

If a referral actually falls under the Stark Law's prohibitions, it still could be allowed if one of the many exceptions to the law applies. For example, Stark lays out exceptions for certain types of economic relationships like office and equipment rental, certain rural providers, specific ownership or investment arrangements between the referrer and the referred-to entity, certain hospital ownership arrangements, in-office ancillary services within group practices, certain physician services and more. Whether an exception applies can be a complicated legal question.

The Stark Law also requires that doctors report certain financial relationships with other entitles to the federal government.

Physician beware

Doctors must take great care to be informed about and to understand Stark so that they do not unintentionally violate it. Civil penalties are very serious and include steep federal fines.

Frankly, the minutia of voluminous detail in the Stark Law and regulations is mindboggling even to an attorney without familiarity. A knowledgeable health care lawyer can review a physician's contracts and financial arrangements with an eye toward preventing Stark referral violation and can help set up a compliance system. Any potentially problematic referral should be thoroughly analyzed by legal counsel.

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