What is Physician Self Referral?
Section 1877 of the Social Security Act (the Act) (42 U.S.C. 1395nn), also known as the Physician Self Referral Law and commonly referred to as the ?Stark Law?:
- Prohibits a physician from making referrals for certain designated health services (DHS) payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership, investment, or compensation), unless an exception applies.
- Prohibits the entity from presenting or causing to be presented claims to Medicare (or billing another individual, entity, or third party payer) for those referred services.
- Establishes a number of specific exceptions and grants the Secretary the authority to create regulatory exceptions for financial relationships that do not pose a risk of program or patient abuse.
The following items or services are Designated Health Services (DHS):
- Clinical laboratory services.
- Physical therapy services.
- Occupational therapy services.
- Outpatient speech-language pathology services.
- Radiology and certain other imaging services.
- Radiation therapy services and supplies.
- Durable medical equipment and supplies.
- Parenteral and enteral nutrients, equipment, and supplies.
- Prosthetics, orthotics, and prosthetic devices and supplies.
- Home health services.
- Outpatient prescription drugs.
- Inpatient and outpatient hospital services.
When enacted in 1989, Section 1877 of the Social Security Act (the Act) applied only to physician referrals for clinical laboratory services. In 1993 and 1994, Congress expanded the prohibition to additional DHS and applied certain aspects of the physician self-referral law to the Medicaid program. In 1997, Congress added a provision permitting the Secretary to issue written advisory opinions concerning whether a referral relating to Designated Health Services (other than clinical laboratory services) is prohibited under section 1877 of the Act. In addition, in 2003 Congress authorized the Secretary to promulgate an exception to the physician self referral prohibition for certain arrangements in which the physician receives non-monetary remuneration that is necessary and used solely to receive and transmit electronic prescription information and established a temporary moratorium on physician referrals to certain specialty hospitals in which the referring physician has an ownership or investment interest.