Providers should review physician relationships

Wednesday, October 31, 2007

Q. Should I be worried about recent changes to the Stark Law?

A. You should be aware that changes in the Stark Law have made it more difficult for physicians to provide DME to Medicare or Medicaid patients.
The Stark Law prohibits physicians from referring a patient for a "designated health service" to an entity with which the physician or a physician's immediate family member has a financial relationship. The list of designated health services includes DME. Thus, a physician who refers a patient for DME may not have a financial relationship with that supplier, unless that relationship falls into one of the Stark Law exceptions.
The Stark Law is an area of great confusion, leading to many federal regulations and legal interpretations through the years. Prior to the recent revisions to the Stark Law, which took effect at the end of October, some attorneys and consultants had argued that a physician could circumvent the Stark Law by personally providing DME to the patient. These advisers reasoned that if the physician personally handed the equipment to a patient, fit and calibrated the equipment, and educated the patient regarding use of the equipment, then no referral would have been made.
However, this alleged loophole has been clearly closed under the revised regulations. Now, if a physician wishes to provide DME services, the physician must personally comply with all the supplier standards. Such a requirement is virtually impossible for any physician to satisfy.
In light of these and other Stark Law changes, homecare companies should review their relationships with physicians for continued compliance with the rules. DME companies have been put on notice that the government is closing potential loopholes in one of its favorite weapons against fraud. The government remains very concerned about physician referrals and physician financial relationships. hme
Brian Miller is an associate attorney at the Health Law Center. Reach him at 864-676-9075 or