Posted: September 2nd, 2022

Physician Self-Referral (Stark) Law

Physician Self-Referral (Stark) Law
1) How would you translate the OIG’s 2005 Special Bulletin on Joint Ventures (see attachment) to help a hospital understand its latitude for entering into joint ventures with physicians?
2) What is a potentially problematic contractual arrangement?
3) Do you think the guidance is too restrictive or not restrictive enough?
4) Why or why not?

1) The OIG’s 2005 Special Bulletin on Joint ventures identifies the problematic nature that manifests in the instances when a physician refers their own business interest or a business where they have financial interest to patients under Medicare so that the physician can provide unfair advantage to the enterprise to which they are linked with. The special bulletin identifies the various instances when a problematic relationship arises and aims to prevent the physicians from taking advantage of their position and ability to refer patients. They law aims to prevent physicians from over utilizing as a result of their self-interest in the financial space. The article discourages physicians showing how such relationship create ground for criminal charges under the Anti-Kickback statutes and Stark Laws.
2)
The potentially problematic contractual arrangements show in the manifestation of a kickbacks in healthcare. This has the potential to bring about overutilization of Medicare allowance for the patient. It also has the potential to proliferate Medicare cost and unduly give one competitor unfair advantage, create space for corruption in procurement decision making because patient is steered to where the doctor has interest as such promote unfair competition within the dependent healthcare industries that supply DMEs, clinical laboratory services, therapies, radiation home health service etc.
3)
They guidance is not too restrictive as it aims to minimize fraud for the benefit of the patient and the free market. Most physicians may be likely target for such schemes as they aim to benefit and gain profit from referrals.
4)
It works to prevent criminal litigation on physicians for arrangement that may work to defraud the federal healthcare program. It forbids malicious compensation to facilitate patient referral on both the physicians and the would be competitor organization.

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