By Timothy P. Blanchard, Michael L. Blau, Ira Coleman, Eric B. Gordon M.D., Daniel H. Melvin, Joan Polacheck, Max Reynolds and Andrew B. Roth
On March 26, 2004, the U.S. Centers for Medicare and Medicaid Services (CMS) issued Phase II of its two-part regulations implementing the federal physician self-referral law or "Stark Law." The following provides a brief introduction and background on the Stark Law and a brief overview of the subjects covered by Phase II.
Named after its legislative sponsor and proponent, Representative Pete Stark (D-Calif.), the Stark Law regulates financial arrangements between physicians and entities that furnish "designated health services" (DHS) paid by Medicare. It does this by prohibiting physicians from making referrals to an entity for Medicare-covered DHS if the physician or an immediate family member has a financial relationship with the entity, unless an exception applies. A financial relationship can arise from an ownership or investment interest
