Understanding the Stark Law: Preventing Conflicts of Interest in Medicare Referrals (Full Transcript)

Speaker 1: The Ethics in Patient Referrals Act is a federal civil law that's more commonly referred to as the Stark Law, after the bill's sponsor, U.S. Rep. Pete Stark. The act is also sometimes referred to as the Physician Self-Referral Law because, in general, it prohibits doctors from referring Medicare patients to the doctor's own entities. Specifically, the Stark Law prohibits doctors from referring Medicare and Medicaid patients for specific listed services if the doctor or the doctor's immediate family member has a financial relationship with the entity providing the referred service, unless an exception applies. This statute is intended to prevent a doctor's conflict of interest from interfering with patient care quality and cost. Imagine that a doctor's mother owned 20 percent of an imaging center. The doctor might be motivated to refer patients to the center for excessive or unnecessary imaging because the doctor's family would benefit financially from those extra tests. But this action would drive up health care costs, waste patient time, and subject patients to unneeded radiation. The Stark Law tries to prevent these negative consequences by prohibiting the doctor from referring any Medicare patients to that particular imaging center, unless an exception applies. So what's considered a referral? Under the Stark Law, a referral is a physician's request for, ordering of, or certification of the need for any designated health service that will be provided by someone else. Services provided by the physician or the physician's employees don't count. In this context, the definition of physician is broad, including medical doctors, dentists, chiropractors, and others.