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Physician Contract Glossary · Regulatory & Compliance

Stark Law

The Stark Law bars physicians from referring Medicare patients for certain services to entities they have a financial interest in, unless an exception applies.

The Stark Law, the federal physician self-referral law, prohibits you from referring Medicare and Medicaid patients for designated health services to an entity in which you or a family member has a financial interest, unless the arrangement fits a defined exception. It is a strict-liability law, meaning intent does not matter, and it shapes how physician compensation and ownership of ancillary services must be structured.

WHAT TO WATCH FOR

If your compensation or any ownership stake touches services you refer to, confirm the arrangement fits a Stark exception, ideally vetted by a health-law attorney. Stark violations carry heavy penalties and intent is no defense.

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