The Federal Anti-Kickback Statute and the Stark Law are often confused because both laws deal with remuneration related to improper referrals. Large groups and multi-specialty practices must make an effort to manage referrals and ancillary services while adhering to these important regulations. It’s helpful to understand the fundamental distinctions between the two laws.

Anti-Kickback Statute [42 U.S §1320a-7b(b)]

The Anti-Kickback Statute is a criminal law that applies broadly and prohibits the knowing and willful payment of remuneration to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs. Keep in mind that the remuneration can be anything of value such as cash, below market value rent, or relief of financial obligations.

Penalties include sizable fines, jail terms, and exclusion from participation in Federal health care programs. Safe Harbors are statutory exceptions that protect from civil and criminal liabilities. Certain payment and business practices that include personal services and rental agreements, investments in ambulatory surgical centers, and payments to bona fide employees may be considered Safe Harbors.

Physician Self-Referral Law [42 U.S.C. § 1395nn]

The Stark Law 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. Immediate family members of the physician are defined as spouse, natural or adoptive parents, children, siblings, step- siblings, in-laws, grandparents, and grandchildren.

This is a strict liability statute, so proof of specific intent to violate the law is not required. Penalties for physicians who violate the Stark Law include fines as well as exclusion from participation in Federal health care programs. Exceptions may be available, but all have detailed criteria that must be met.

Highlights of the Laws:

Stark

• Civil penalties
• Applies only to Designated Health Services (DHS) paid for by Medicare
• Is strict liability (no intent required)
• Must involve a physician and an entity
• Exceptions available

The Anti- Kickback Statute

• Civil and criminal penalties
• Applies to Medicare and any Federal Healthcare Program
• Requires proof of improper intent
• Applies to any referral source (not just physicians)
• Safe Harbors available