Stark and Anti-Kickback Primer

00:00:00 Hi, it's Dr. Weitz. Thanks so much for joining me for this episode of the Private Medical Practice Academy. Stark and Annie Kickback laws are one of those topics that stresses every physician out in part because they're so complicated to understand today. I wanna give you an overview that will at least arm you with the questions you need to ask your healthcare attorney.

00:00:24 Stark and Annie Kickback were put in place to prevent fraud and abuse in healthcare. The Stark Law is also known as the Physician's Self-Referral Law, which is a better name since it describes what the law actually is intended for. The Stark Law prohibits physicians from referring patients to entities in which they have a financial interest. The intent is to prevent financial incentives from driving medical decision making.

00:00:52 Now, for the purpose of this podcast, I'm gonna refrain from the diatribe about how this happens every day in medicine, and that physicians are not the only ones in the position to obtain financial rewards. Just understand that that was the original intent of this law. The Anti-Kickback statute prohibits the exchange of anything of value for referrals, for services paid for by federal programs such as Medicare and Medicaid.

00:01:21 Stark and Andy Kickback apply to healthcare providers, suppliers, and manufacturers, and it's enforced by the Department of Health and Human Services and the Office of the Inspector General, otherwise known as the oig. Violating these laws can result in significant penalties, including fines being excluded from participating in federal programs and potentially criminal prosecution. As a private practice physician, you are responsible for knowing these laws and being in compliance.

00:01:56 It's not okay to just say, oh, I had no idea. I'm sure that one of the questions you have is whether these laws also apply to commercial insurers. The short answer is yes in certain situations. For example, if you participate in federal programs and commercial insurance plans, you must ensure that your financial relationships and billing practices are compliant with both federal and state laws.

00:02:26 Remember that if you're participating in any of the Medicare Advantage plans, that while they're run by commercial insurers such as United or Humana, they are fundamentally Medicare and therefore subject to federal law. If a commercial insurer finds your overbilling or providing unnecessary services, you could also be prosecuted under Stark and Andy Kickback. And because commercial insurers often base their reimbursement rates on Medicare,

00:02:56 physicians who violate Stark and Andy Kickback May find themselves excluded from participating in commercial insurance networks. So I wanna give you some examples of Stark Law violations. First, a cardiologist refers a patient to a diagnostic testing facility in which they have a financial interest. This violates Stark's prohibition on self-referral for a designated health service. Next example, a hospital enters an arrangement with a physician where the hospital pays the physician a medical directorship on its face.

00:03:36 This is legit, however, the payments are found to exceed fair market value, and therefore it violates Stark's requirement. The financial arrangements, be it fair market value. Similarly, if you rent space in a hospital owned medical office building and they give it to you for less than the fair market value rent, that's also a violation. And one more example,

00:04:04 a physician is found to be billing Medicare for services provided by an unlicensed mid-level. This violates Stark's requirement that services be provided by licensed providers. Now, you're probably thinking to yourself, well, I'm not gonna hire somebody who's not licensed. Of course you're not. But what happens if their license expires? This is where having a plan, a particular file for knowing whose license expires when and making sure that everything is up to date becomes so important.

00:04:34 Now, what if you want to refer patients to a physical therapy service in which you or a member of your immediate family has a financial interest? Based on what I've told you, you're probably thinking, oh, so apparently I can't do that. Well, it turns out that you can if that referral meets certain exceptions under the Stark Law. So what are these exceptions?

00:04:59 The most common applicable exception is what is called the in-office Ancillary Services exception. This allows physicians to refer patients for certain health services, including physical therapy, diagnostic imaging, and lab services that are provided in the same building where the physician's medical practices located if certain requirements are met. So if you're not getting the feeling that that each one of these things has a whole list of requirements associated with it,

00:05:34 they do. And that's where it's really important to understand those requirements. Some of these requirements include that the service is furnished under the direct supervision of the referring physician or another provider in the same group practice that the services build under the physician's individual or group NPI number, And that the arrangement complies with fair market value. If you are thinking about adding any of these services,

00:06:06 I would strongly encourage you that you talk to a healthcare attorney to understand whether it actually qualifies for the in-office ancillary services exception before you invest any money in adding these services. Because being out of compliance is going to cost you way more than it's going to cost you to actually talk to that healthcare attorney. Now, there are a couple of other exceptions that I wanna talk about.

00:06:33 First, the non-monetary compensation exception. This allows providers to give non-monetary compensation i e meals or gifts to physicians and their families, provided that the total value of the compensation does not exceed the 2023 annual limit of $429. Now, that is per physician, and you wanna review this every year because the limit changes. You can certainly bring them a holiday gift as long as it's within this limit and it's not tied to anything.

00:07:12 Next, there is the fair market value compensation exception. This allows providers to enter into a financial relationship with other providers as long as you're compensating them at a fair market value. And it doesn't take into account the volume or the value of referrals. And then there are a couple of other exemptions. Academic medical centers that meet certain criteria may provide compensation to physicians who are engaging in teaching or research activities.

00:07:43 As long as that compensation is not related to the volume or value of referrals that that physician brings to that entity. And if you are a rural provider, you may be able to enter into certain financial relationships that would otherwise be prohibited under Stark, provided that certain criteria are met. Given the complexity of this particular exception, I would really urge rural providers not to embark on this without talking to your healthcare attorney first.

00:08:19 Now, let's turn our attention to the Anti-Kickback statute. This statute prohibits providers from knowingly and willfully offering or receiving any form of remuneration in exchange for referrals for services that are paid for by federal programs. However, just like with Stark, there are a bunch of exceptions and the user called Safe Harbor Provisions. So first, there is an exemption for investments in entities that provide healthcare Services as long as that investment meets certain criteria such as the fact that the investor has told the investment for at least one year,

00:09:05 and again, that it's not tied to volume or value of referrals. Another safe harbor is space and equipment rentals. These are covered when office space or equipment is rented between providers. If the rental agreement meets certain criteria such as that, the rental amount must be consistent with the fair market value and that the rental must be for at least one year. There's also an exception for personal services and management contracts between providers as long as the agreement again meets certain criteria such as the compensation paid must be at the fair market value,

00:09:50 and the agreement must not be tied to the volume or value of referrals. And then last, there is an exception for the donation of EHR items and services as long as the donation meets the certain criteria, including the fact that the recipient must pay at least 15% of the cost of the e a r. So if you're not getting the message yet, the key takeaways of Stark and Anti Kickback,

00:10:21 you don't know anything else about it, is that you can't do anything that is tied to the volume or the value of referrals, and that any financial arrangement has to be at fair market value. So basically, you can't say to a doc, wink, wink, nod, nod, I will give you X if you send me more patients, and that amount that I'm going to give you is tied to how many patients you send or how much money I make from those patients.

00:10:56 That should be intuitively obvious from listening to this podcast and understanding the intent of Stark and anti Kickback. But I can't stress to you enough that that cannot happen. I also wanna tell you that Stark and Annie Kickback are federal laws. In addition to that, many states have their own version of Stark and Andy Kickback. So even if something is legit on the federal level,

00:11:22 you may still be subject to your state law. The purpose of this podcast was to give you an overview. It is not meant to be an exhaustive discussion of the stark and anti kickback laws. I strongly encourage you to discuss Stark and anti Kickback with your healthcare attorney every time you are contemplating doing something so that you know what is required and that you remain in compliance,

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