Corporate Compliance

New Stark law regulations loom over healthcare professionals

Compliance Monitor, September 30, 2009

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Significant changes to the federal Physician Self-Referral Law, or Stark Law, will take effect October 1, creating potential compliance liabilities for physicians and hospitals, reports the American Medical News (AMN).
 
CMS proposed the changes to the Stark Law, considered to be one of the most complex regulations in healthcare, in the 2009 IPPS final rule. CMS will eliminate:
 
• “Under arrangement” contracts, in which hospitals contract with physician-owned entities to provide ancillary services
• Per use or “per-click” payments for equipment and space leases
• Compensation deals based on percentage of revenue generated by space or equipment use
 
Unlike other liability statues, Stark law violations do not depend on a physician’s intent to defraud. “Stark is a strict-liability statute. So even if you have the most innocent of intentions, you are still subject to the grossest of penalties, as if you meant to violate the law,” said Lawrence W. Vernaglia, Esq., co-chair of Foley & Lardner LLP’s national healthcare payments, fraud and abuse, and compliance work group.
 
Under the new rule, CMS will consider physicians to have a direct ownership stake in the designated health services they provide, basically eradicating referrals unless they comply with Stark’s stricter ownership exceptions, reports AMN.



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