Weiss Zarett Brofman Sonnenklar & Levy, P.C., Guides You Through Stark Law Issues
The Physician Self-Referral Law, commonly referred to as 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.
At Weiss Zarett Brofman Sonnenklar & Levy, P.C., we provide a significant benefit to health care businesses.
Understanding The Anti-Kickback Statute
The Anti-Kickback Statute (AKS) prohibits offering, paying, soliciting or receiving anything of value to reward or induce patient referrals where services will be paid by a federal health care program.
The AKS is a criminal statute and provides that giving or receiving any kickbacks for referrals is a felony punishable by a fine of up to $25,000 and five years in prison and can also include civil penalties far more than that amount.
The AKS contains exceptions for personal services and management contracts and contracts involving equipment and space rentals.
There Are Rules Around Providers Paying Management Companies
Under the federal Anti-Kickback Statute, among other federal and state laws, authorities may view excessive compensation paid to a management company as an improper referral fee or “kickback” for the management company’s referral of patients to the provider. This can lead to serious risks for providers, including possible criminal liability. Accordingly, to stay within established “safe harbors” relating to management services, management companies may only be reimbursed the “Fair Market Value” of the services they provide. As to what constitutes Fair Market Value, this is a complex question, which is why we recommend working with experienced counsel to structure these arrangements and with other qualified professionals to ascertain the fair value of management services being provided.