Physicians be careful – sweet promotions sometimes turn into poisonous Stark Law violations.

The latest version of the Omnibus Budget Reconciliation Act, also known as the Stark Law, came into effect in 2008 and prohibits physician referrals for Medicare and Medicaid patients if the physician has a financial relationship with the target entity. Penalties include denial of payment, stiff fees, exclusion from Medicare/Medicaid and more. It’s closely related to the similar federal Anti-Kickback Statute.

This isn’t toothless law. The government is more than willing to prosecute violators. In 2013, a South Carolina hospital was taken to trial for providing kickbacks to 19 specialist physicians. The hospital provided employment benefits and bonuses in exchange for exclusive referrals. The court found them guilty of thousands of Stark violations and now they face up to $39 million in fines.

The Stark Law defines a financial relationship as ownership or investment interests or as having some form of compensation arrangement. This can include direct benefits, such as payments, or indirect benefits such as gifts. Survey payments and registries can also be suspect.  Prescribers should ensure the  patient information is being used for legitimate causes.

There are, of course, some exceptions to these rules, such as investments via mutual funds, bona fide employees and legitimate registries, but beware.

If you have any doubts about your compliance with Stark Law provisions, review the information on www.starklaw.org.