Five Stark Law Developments Physicians Can’t Afford To Miss

Abstract

Since the passage of the Omnibus Budget Reconciliation Act of 1990, physicians and healthcare entities have had to navigate the potholes and roadblocks of the so-called “Stark laws.” Physician-owned ASCs, hospitals, and other treatments centers not qualifying as physician offices have had to keep up with ever-shifting (and ever-tightening) rules about self-referral.

Five recent updates require the attention of every physician who deals regularly with compliance to Stark regulations:

• Recent CMS guidelines issued for physician-owned hospitals. CMS rarely issues such guidance, but it recently published guidance for a physician-owned hospital to relocate eight miles from its present site and to add an emergency department if it was going to retain its “whole hospital” exemption.

• “Payment by a Physician” exception applies more broadly than thought. Once considered a last resort for exception, CMS clarified it as it applies to fair-market-value transactions like equipment rental.

• Physician imaging practices. A study published by the American Journal of Roentgeology noted the large number of orthopedists interpreting x-rays in their own offices and OB/GYNs interpreting their own sonograms. To avoid Stark complications, doctors have pursued these strategies. The article raised concerns about quality and patient safety when images aren’t interpreted by radiologists.

• Stark-law enforcement (and whistleblower activity) surged in 2024. Last year saw a record 979 qui tam (whistleblower) lawsuits and seven major indictments.

• ASC ownership deals. ASC transactions must pay close attention to Stark compliance, particularly in regard to:

  • Overpaying for controlling interest (possible referral-purchasing),

  • Underpricing non-controlling interest (possible favoring of referring physicians), and

  • Making sure all transactions fall within fair-market-value range.

Expert Commentary

Stark regulations have been the legislative gift of the last century that keeps on giving. (The same could be said about coding guidelines and HIPAA regs, too.) Physicians who practice in situations full of Stark landmines must stay on top of legal developments year after year. Doctors with in-office ancillary services or those who have ownership interests in hospitals, ASCs, and other care-delivery locations can’t afford to falter in their vigilance.

That doesn’t mean a busy physician has to memorize the complicated rules and sort out the ones relevant in his or her practice, however. You can delegate compliance responsibilities to staffers. It’s not that they have the responsibility to comply, but that they would be tasked with combing the resources and learning the latest rules and applications, and they would coordinate training for clinicians and billers — anyone whose job duties include activity that could threaten compliance and audit risk. As software gets smarter, these responsibilities should be easier to accomplish, but your practice needs in-house experts to guide the organization through the maze of rules confronting all providers today.

Source: Five Stark Law Developments Physicians Can’t Afford To Miss, Patsy Newitt, Becker’s ASC Review, May 12, 2025; https://www.beckersasc.com/asc-coding-billing-and-collections/5-stark-law-developments-physicians-cant-afford-to-miss/