Stark law enforcement is intensifying as the Justice Department recovered a record $6.8 billion under the False Claims Act and regulators continue refining key exceptions that shape how physicians structure financial relationships.
Here are eight developments to watch this year.
1. Enforcement remains intense. The Department of Justice’s 2025 year-end report shows a record $6.8 billion recovered under the broader False Claims Act, with whistleblowers filing 1,297 qui tam lawsuits, a sign of high enforcement activity in areas where Stark law violations may be implicated.
2. Stark-related case activity continued in 2025. Becker’s reported on six Stark law cases in 2025. In January, five Florida ophthalmology practices agreed to pay nearly $6 million to resolve allegations of submitting false claims to Medicare and Medicaid for medically unnecessary transcranial doppler ultrasound, along with allegations of Stark law violations.
3. Non-monetary compensation cap increased to $535. As of Jan. 1, ASCs, hospitals, physician groups and other DHS entities may provide non-cash compensation to physicians up to an aggregate total of $535 per physician. Non-monetary compensation that does not exceed $535 can be provided as long as it doesn’t take into account the volume or value of referrals or other business generated by the physician and is not solicited by the physician or the physician’s practice, including requests from staff or employees acting on the physician’s behalf.
4. Physician frustration with Stark is growing. Stark law, originally enacted in 1989 to curb physician self-referrals, has become one of the most contentious regulations in American medicine. While designed to protect patients from conflicts of interest, physicians argue that the law has morphed into a tool that protects corporate consolidation rather than patients.
“It was written by senators and lawyers who don’t follow the same rules,” Niazy Selim, MD, a private practice GI surgeon in Lake Charles, La., told Becker’s. “Lawyers can accept referrals — why not physicians? Someone’s life is on the line. If a physician sends a patient to a more qualified physician, Stark law says, ‘no.’ That’s nonsense.”
5. Groups are pushing for reform, and lawmakers are floating changes. Physician leaders and industry groups are calling for updates. The Medical Group Management Association has labeled Stark law a “major regulatory burden,” and bipartisan lawmakers have floated reforms, including a 2024 House bill to expand in-office exemptions. MGMA’s advocacy priorities for Stark law reform include:
- Revising compensation arrangement rules: The group argues that these provisions are outdated and unnecessary in a value-based system, where overutilization is no longer a primary concern.
- Enhancing the group practice model: MGMA supports simplifying the statutory definition of a group practice and revising penalty provisions to ensure fines only apply when prohibited referrals cause demonstrable harm.
6. CMS signaled broader use of the “Payments by a Physician” exception. In 2025, CMS confirmed through Self-Referral Disclosure Protocol submissions that the “Payments by a Physician” exception under Stark law may apply more broadly than many physicians have believed, according to a May blog post from Hall, Render, Killian, Heath & Lyman.
One Stark exception allows physicians to pay fair market value for services or items, such as renting equipment or office space, without triggering a referral violation. Historically, many providers believed this exception could only be used when no other Stark exceptions applied, which limited its use even in eligible situations.
According to the post, CMS appeared to reinforce that narrower interpretation in 2007 and again in 2015, stating the exception could not be used for arrangements like office timeshares. In 2020, CMS reversed course and said the exception can be used even if other Stark exceptions apply, as long as the payment meets fair market value criteria. A 2007 typo — substituting “excepted” with “addressed” — was cited as a source of confusion, and CMS later clarified it was an error not intended to limit the rule.
CMS now explicitly allows providers to rely on the “Payments by a Physician” exception in more scenarios than previously assumed, even when other regulatory exceptions exist. The exception is attractive because it is easier to meet than many others, according to the post: It does not require a written contract, a specific duration or proof of commercial reasonableness.
7. Imaging interpretation practices are drawing scrutiny. According to an April study by the Neiman Healthy Policy Institute, office-based physicians are interpreting hundreds of thousands of medical images they ordered themselves each year rather than sending them to trained radiologists. The study found that nonradiologists working in physician offices ordered more than 1.6 million imaging exams for Medicare beneficiaries in 2022, and interpreted about 43.6% themselves rather than having radiologists review them.
Researchers used the CMS 5% research identifiable file for 2022 to identify claims for office-based, nonbreast diagnostic imaging ordered by nonradiologists for a nationally representative sample of Medicare fee-for-service beneficiaries. Only 36.4% of those claims were interpreted by radiologists, while 58.5% were interpreted by another clinician within the same practice as the referrer.
Vijay Rao, MD, a co-author of the study and senior vice president of enterprise radiology at Jefferson Health in Philadelphia, said in a statement the findings indicate a need for federal policy reform.
“Our results raise potential implications for quality of patient care. Nonradiologist specialties, aside from cardiology, lack the rigorous and comprehensive training in imaging interpretation that occurs during the four years of a radiology residency program,” he said in the statement. “The large differences between radiologists and nonradiologists in interpretation training could lead to differences in diagnostic accuracy.”8. CMS weighed in on a physician-owned hospital relocation. In March, law firm McGuireWoods secured a CMS Stark law advisory opinion for a physician-owned hospital seeking to relocate eight miles from its current site and add an emergency department, according to a news release from the firm. CMS determined the relocated hospital would still qualify for the whole hospital exception under Stark law. According to the release, the key factor was that the hospital maintained physician ownership and a Medicare provider agreement as of Dec. 31, 2010, allowing it to retain its exemption.
