Patient Referral Laws: A Guide for Healthcare Providers
Understanding the Stark Law and Anti-Kickback Statute: A Guide to Federal Laws on Patient Referrals for Healthcare Providers
In healthcare, patient referrals are strictly regulated by federal law. Many states also have laws related to patient referral. There are two important federal rules physicians and other healthcare providers should know: the Stark Law and the Anti-Kickback Statute (AKS).
Executive Summary: What do healthcare providers need to know about patient referrals?
In general, physicians and other healthcare providers are prohibited from making referrals for many services if they (or their immediate family members) stand to benefit financially from the referral, unless a specific legal exception or safe harbor applies. In addition, healthcare providers are not allowed to pay to get patient referrals from others.
What is the Stark Law?
The Stark Law, also known as the Physician Self-Referral Law, prohibits physicians from referring patients to receive certain designated health services (DHS) payable by Medicare or Medicaid from entities with which the physician (or an immediate family member) has a financial relationship, unless an exception applies.
Key Features of the Stark Law:
- Strict liability law – a violation does not require proof of intent.
- Applies only to Medicare and Medicaid.
- Covers Designated Health Services (DHS) such as:
- clinical laboratory services
- physical therapy, occupational therapy, and outpatient speech-language pathology services;
- radiology and certain other imaging services;
- radiation therapy services and supplies;
- DME and supplies;
- parenteral and enteral nutrients, equipment, and supplies;
- prosthetics, orthotics, and prosthetic devices and supplies;
- home health services;
- outpatient prescription drugs; and
- inpatient and outpatient hospital services.
Penalties for Violation of the Stark Law:
- Denial of payment for services.
- Requirement to repay amounts collected.
- Civil penalties up to $15,000 per service.
- Potential exclusion from federal health programs.
What is the Anti-Kickback Statute (AKS)?
The Anti-Kickback Statute is a criminal law that prohibits the knowing and willful offering, payment, solicitation, or receipt of any form of remuneration to induce or reward referrals for services or items reimbursable by a federal healthcare program.
Key Features of the AKS:
- Requires intent – violators must knowingly engage in prohibited conduct.
- Applies to any federal healthcare program, including Medicare, Medicaid, TRICARE, and others.
- Prohibits both sides of a transaction (payer and recipient of kickbacks).
Penalties for Violation of AKS:
- Fines up to $100,000 per violation.
- Up to 10 years in prison.
- Civil monetary penalties.
- Exclusion from participation in federal healthcare programs.
Is it legal for drug companies to pay physicians to prescribe their drugs to patients?
Under the Anti-Kickback Statute, it is illegal for pharmaceutical companies to provide direct payments to physicians in exchange for the physician prescribing the company’s drugs to patients.
Stark Law vs. Anti-Kickback Statute: Key Differences
| Feature | Stark Law | Anti-Kickback Statute (AKS) |
|---|---|---|
| Applies to | Physicians only | Any individual or entity |
| Legal Nature | Civil (strict liability) | Criminal (intent required) |
| Programs Covered | Medicare and Medicaid only | All federal healthcare programs |
| Prohibited Conduct | Self-referrals with financial interest | Payments or incentives for referrals |
| Penalties | Civil fines, payment denials | Criminal charges, fines, exclusion |
Further Resources
Guide to Laws about Health and Healthcare
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