Affordable Care Act Makes Important Changes to the Stark Law

The Stark Law is a federal health care statute that limits physician referrals. The Affordable Care Act (ACA) has made some important changes to the Stark Law that medical providers should be aware of.

Elimination of the whole hospital exception

The whole hospital exception in the Stark Law allowed a physician to refer patients to a hospital in which the physician has an ownership interest, so long as that ownership interest is in the entire hospital as opposed to a subdivision of the hospital.

The ACA has eliminated this exception for new hospitals, but has grandfathered in existing physician-owned hospitals that had Medicare provider agreements in place on or before December 31, 2010.

Notice requirement for the ancillary services exception

The ACA contains transparency requirements for physician ownership of certain ancillary services.  Physicians are now subject to notice requirements when referring patients for MRI, CT or PET scans. Physicians must provide the patient with written notice that:

  • The physician has an ownership interest in the imaging or other service provider to which the physician has referred the patient
  • The patient has the option to obtain the services from a person other than the referring physician or a member of the same group practice

The notice also must provide the patient with a list of alternative providers in the area.

New self-reporting protocol for violations of the Stark Law

The ACA provides a protocol for a self-disclosure process through which health care providers and suppliers can divulge actual or potential violations of the Stark Law. The ACA also authorizes the secretary of the Department of Health and Human Services to reduce the penalty for self-disclosed violations of the Stark Law to less than full reimbursement. This is a significant reform because Stark Law penalties usually require full reimbursement of the amount billed.

Consulting knowledgeable health care attorneys will help you stay informed of the newest ACA developments so you can remain in compliance.

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Posted in: Regulation, Stark Law