What law is triggered when physicians own businesses providing designated health services?

The Stark law, formally known as the Physician Self-Referral Law, is designed to prevent conflicts of interest that arise when physicians refer patients to businesses in which they have a financial interest, specifically those providing designated health services. This law prohibits physicians from making referrals for certain health services payable by Medicare to entities with which they have a financial relationship unless an exception applies. The intention behind the Stark law is to protect patients and ensure that medical decisions are made based on the best interests of the patient rather than financial benefit to the physician.

The significance of the Stark law lies in its focus on the self-referral process, which addresses situations where a physician's financial interests could unduly influence their medical decision-making. This can include services such as laboratory tests, physical therapy, and imaging services, among others.

Understanding the application of the Stark law is essential for compliance officers in healthcare settings, as violations can result in significant penalties, including denial of payment, fines, and even exclusion from participation in federal healthcare programs. It is crucial for healthcare providers to establish and follow policies that ensure compliance with the Stark law to avoid legal and financial repercussions.