Law firm Day Pitney outlined critical points for group practice compliance with Stark Law in a November blog post.
Here are 10 key takeaways:
1. Stark Law defines "group practice" with a specific legal framework. It’s more than a collaborative office of medical practitioners — compliance requires adherence to detailed federal regulations.
2. Group practice status is critical for Stark law compliance, particularly for qualifying for exceptions such as:
- The physician service exception, which permits internal referrals within the group.
- The in-office ancillary services exception, which allows referrals for services like lab tests, imaging and physical therapy performed within the practice.
3. To qualify as a group practice under Stark law, a medical practice must meet specific criteria, including:
- Operating as a single legal entity.
- Employing at least two physicians.
- Delivering the full range of patient care services.
- Using shared resources, personnel, and office space.
4. At least 75% of physician services must be furnished and billed through the group, and physicians must personally perform at least 75% of patient encounters within the practice.
5. Practices must distribute overhead expenses and income based on methods established in advance to ensure compliance.
6. Group practices must centralize decision-making and maintain consolidated billing, accounting and financial reporting systems. Location- or specialty-based compensation is allowed for non-designated health services.
7. Physician compensation within a group cannot be based on the volume or value of referrals.
8. Profit sharing must be allocated in a reasonable, verifiable way unrelated to referral volume.
9. Productivity bonuses can only reflect services personally performed by physicians or those "incident to" those services.
10. Physicians and other healthcare providers should keep a sharp eye on potential Stark law allegations amid increasing federal scrutiny. CMS settled a record-breaking total of $12.6 million in Stark law in 2023, a 552% increase from 2021.