For those of you who have not been watching your Stark radar screen closely, be aware that CMS recently made a number of substantial changes to the Stark self-referral regulations that may affect your practice arrangements. Some of these changes will not take effect until October 1, 2009, but others changes will take effect on October 1, 2008. Key changes include (but are not limited to the following:

1.  “Stand-in-the shoes” Relationships – Under current regulations, physicians who refer to a Stark entity with which they have a financial relationship will be deemed to “stand in the shoes” (i.e., be treated as if they had the same compensation arrangements) of their physician organizations (e.g., their medical practice entity). CMS has clarified that, Effective October 1, 2008, this rule only applies to physicians who have an ownership interest in the physician organization – not physicians who are only employees, independent contractors or whose ownership interest is only titular.

2.  Services Furnished “Under Arrangements” — CMS has in the past expressed concern over “under arrangements” ventures where a physician supplies items and services to a hospital for which the hospital bills the Medicare program and pays the physician fee. To address this concern, CMS has revised the definition of the term “entity” for purposes of the Stark prohibitions to the person or entity that actually performs a Stark services as well as the entity that causes a claim for the Stark service to be submitted to the Medicare program. This change will take effect on October 1, 2009.


3.  Per Click and Percentage-Based Compensation – The Stark regulations now expressly prohibit the use of “per service/per click” and percentage-based rent arrangements under space and equipment leases between physicians and entities to which they refer for Stark services. Percentage compensation arrangements are still permissible under Stark for personal services arrangements however. This change will take effect on October 1, 2009.

The Stark regulations continue to grow increasingly complex.  Because Stark is a strict liability statute (which means even inadvertant violations can result in substantial liability), physicians are encouraged to examine their existing financial relationships (ownership and compensation relationships) for compliance with these rules.  If you would like assistance in doing such an analysis or for assistance with any of your Stark questions, please contact Todd Rodriguez.