Pursuant to the authority granted by the U.S. secretary of health and human services,the Centers for Medicare and Medicaid Services (CMS) recently enacted an amendment to the Federal Physician Self-Referral Law (Stark Law), which became effective January 1, 2016. The amendment adds much-needed flexibility for independent physicians who share office space and for hospitals that provide office space, equipment, personnel, supplies, and services to part-time, independent physicians on an “as-needed” basis. See 42 U.S.C. § 1395nn(b)(4); 42 C.F.R. § 411.350.
As a general matter, the Stark Law prohibits a physician from making referrals for certain designated health services (DHS) that are payable by Medicare to health-care entities with which the referring physician has a financial relationship, unless an exception applies. Contrary to the federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), the Stark Law is a strict liability statute in that it does not require proof of intent. The penalties associated with a Stark Law violation include denial of reimbursement, the refund of reimbursement for past claims, fines of $15,000 per DHS claim, penalties of up to $100,000, exclusion from federal health-care insurance programs, and liability under the False Claims Act.