STark Law
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What is Stark Law?
First enacted by Congress in 1989, Section 1877 of the Social Security Act (referred to as the, ‘Physician Self-Referral Law’ or more commonly, ‘Stark Law’) was implemented to protect Medicare and other beneficiaries from costs associated with physician referrals for clinical laboratory services with which they had a direct financial relationship with. As part of the Omnibus Reconciliation Act of 1993, Stark Law was further expanded (Section 1903) to prohibit all referrals to ‘Designated Health Services (DHS)’ payable by Medicare with which the physician (or an immediate family member) has a financial relationship, unless an exception applies.
Since then, the Centers for Medicare & Medicaid Services (CMS) have published a number of rules and regulations interpreting the Stark Law statute, defining covered DHS entities, and petalites for non-compliance.
The Importance of Complying with Stark Law
Regulatory compliance requires adherence to numerous laws, regulations, and ethical codes that govern the healthcare industry. In general, these are in place to ensure that healthcare entities and professionals operate within a framework that prioritizes patient safety, data confidentiality, and upholds the integrity of medical practices.
Federal fraud and abuse laws include the Physician Self-Referral Law [42 U.S.C. § 1395nn], commonly referred to as the Stark law, which prohibits physicians from referring patients to receive “designated health services” payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies.
Stark Law requires transparency reporting to demonstrate the monetary connections made by medical device manufacturers and pharmaceutical companies to physicians and teaching hospitals. These mandated reporting requirements are intended to provide a policy goal of preventing inappropriate financial influence on education, research, and patient clinical decision-making.
The federal entities overseeing the enforcement of Stark Law include: the Department of Justice (DOJ), the Centers for Medicare and Medicaid Services(CMS), and the Department of Health and Human Services Office of Inspector General (HHS OIG). At its core, it is designed to eliminate any potential conflict of interest that could cloud medical judgment. By ensuring that healthcare decisions are solely guided by patients’ best interests, devoid of any financial incentives for physicians, it upholds the ethical standards and transparency crucial to healthcare services.
Under the Stark Law, any HCP, healthcare system, or hospital covered by the statute faces strict liability for violations. They can be found at fault for breaches, irrespective of intent or awareness. In other words, merely demonstrating an improper referral suffices to establish liability, regardless of whether the HCP was aware of potential financial or familial conflicts.
Violation of the Stark Law may require the HCP to refund all payments for the improper amounts collected; to pay up to $15,000 per improper referral; and to be excluded from all federal healthcare programs.
Applicable DHS Entities Covered Under Stark Law
What Healthcare Organizations Need to Know
There is an exception in Stark Law which allows DHS entities to provide non-monetary compensation to Healthcare Professionals (HCPs) up to an aggregate amount each year (adjusted annually for inflation).
For the calendar year of 2025, if the aggregate amount goes above $519, the DHS provider will face penalties for violating Stark Law including but not limited to civil penalties per violation, exclusion from the Medicare, and a denial of refund from Medicare.
It is up to the DHS provider to track and record non-monetary compensation expenses and any errors or overages are expected to be reported to CMS using the Self-Referral Disclosure Protocol. To Learn more about Stark Law regulations, please visit the CMS website: https://www.cms.gov/.
How MedPro Systems Can Help
The MedPro Concur Connect suite offers DHS entities a comprehensive approach for monitoring non-monetary compensation to HCPs to streamline Stark Law compliance.
MedPro Concur Connect – Expense
Enables Sales Representatives to access MedPro data directly within Concur Expense to capture key HCP identifiers in real time, empowering accurate matching and reporting.
MedPro Concur Connect – Export
Expense data is exported to MedPro via automated Concur Attendee Detail Extract (ADE) files, securely delivered via MedPo hosted FTP.
MedPro Data Matching, Tracking and Report Creation
After Export, MedPro automatically loads the ADE files and matches HCP against the MedProID database to aggregate spend . Stark customers will be given access to MedPro Compliance Reporting ID to view our Stark Law Analytics report. This report will track unique physicians, and the current aggregate spend against them across your organization.
MedPro’s reports and dashboards enable you to stay ahead of potential overages and compliant with Stark law, avoiding fines or penalties. Find activity trends with HCPs and your own sales representatives to accurately and efficiently manage expenditures and reporting.
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