Does Stark Law Apply to Physicians Assistants? A Clear Explanation
The short answer is generally no, the Stark Law doesn’t directly apply to Physician Assistants (PAs). However, their services can trigger Stark Law violations when billed under a physician’s provider number or when they are involved in referrals from a physician with a prohibited financial relationship.
Understanding the Stark Law
The Stark Law, formally known as Section 1877 of the Social Security Act, is a federal law that prohibits physicians from referring patients for certain designated health services (DHS) payable by Medicare or Medicaid to entities with which the physician or an immediate family member has a financial relationship, unless an exception applies. The core purpose of the Stark Law is to prevent fraud and abuse within the healthcare system. This law is incredibly complex, with numerous exceptions and nuances that require careful consideration. Violations can result in significant penalties, including fines, exclusion from federal healthcare programs, and even imprisonment in certain cases.
Designated Health Services (DHS)
The Stark Law focuses specifically on designated health services (DHS). These services are a key component of the law and define which medical services are subject to its restrictions. The current list of DHS includes:
- Clinical laboratory services
- Physical therapy services
- Occupational therapy services
- Outpatient speech-language pathology services
- Radiology and certain other imaging services
- Radiation therapy services and supplies
- Durable medical equipment and supplies
- Parenteral and enteral nutrients, equipment, and supplies
- Prosthetics, orthotics, and prosthetic devices and supplies
- Home health services
- Outpatient prescription drugs
- Inpatient hospital services
- Outpatient hospital services
The Physician’s Role and the Stark Law
The Stark Law primarily targets physicians because they are the gatekeepers of many healthcare services. Their decisions regarding referrals can be influenced by financial incentives, potentially leading to unnecessary or inappropriate care. The law aims to ensure that referrals are based on medical necessity and patient well-being, not on the physician’s financial gain.
How PAs Can Trigger Stark Law Violations
While Does Stark Law Apply to Physicians Assistants? – directly, the answer is typically no. However, a PA’s actions can indirectly lead to Stark Law violations. Here’s how:
- Billing Under a Physician’s Provider Number: If a PA’s services are billed under a physician’s provider number and that physician has a prohibited financial relationship with the entity providing the DHS, it can trigger a violation. Even if the PA has no personal financial stake, the billing arrangement links the service to the physician.
- Referrals Originated by Physicians: If a physician makes a referral for DHS to an entity with which they have a financial relationship, it is a violation, regardless of whether a PA was involved in the patient’s care at some other point. For example, a PA seeing a patient and then informing a physician who then makes the referral is still a physician referral subject to Stark.
- Supervisory Relationships: If a PA works under the supervision of a physician who is engaged in an illegal kickback or other prohibited financial arrangement, the PA’s actions could be implicated, even if the PA is not directly receiving any financial benefit. The supervisory relationship links the PA’s services to the physician’s potential violation.
- Employment Arrangements: If a physician group practice employs a PA, the employment arrangement itself must be scrutinized to ensure compliance with Stark Law. Compensation paid to the PA cannot be tied to the volume or value of referrals made by the physician-owners of the practice to DHS entities with which they have a financial relationship.
- Indirect Compensation Arrangements: Arrangements where PAs receive benefits that are indirectly linked to a physician’s referrals could also potentially trigger Stark Law concerns.
Important Considerations and Exceptions
Even though the Stark Law doesn’t directly target PAs, healthcare organizations must carefully structure their arrangements with PAs to avoid inadvertent violations. Certain exceptions to the Stark Law, such as the bona fide employment exception, can provide safe harbors for certain arrangements. However, these exceptions have specific requirements that must be strictly followed.
| Exception | Description | Relevance to PAs |
|---|---|---|
| Bona Fide Employment | Requires a legitimate employer-employee relationship with reasonable compensation not tied to the volume or value of referrals. | Crucial when PAs are employed by physician practices; compensation must be fair market value and not referral-dependent. |
| In-Office Ancillary Services | Allows referrals for DHS performed within a physician’s office under certain conditions. | Can be relevant if a PA performs DHS within the same practice, ensuring compliance with the stringent requirements of the exception. |
| Fair Market Value Compensation | Arrangements must be commercially reasonable and at fair market value, without regard to referrals. | Essential for contracts and other financial arrangements involving PAs and physicians. |
Recommendations for Compliance
Healthcare providers should take the following steps to ensure compliance with the Stark Law when working with PAs:
- Review employment contracts: Regularly review employment contracts to ensure they comply with Stark Law requirements, particularly regarding compensation and referral practices.
- Educate staff: Provide comprehensive training to physicians and PAs on the Stark Law and its implications.
- Implement compliance programs: Establish robust compliance programs that include regular audits and monitoring to identify and address potential violations.
- Seek legal counsel: Consult with healthcare attorneys to obtain guidance on specific situations and ensure compliance with the complex provisions of the Stark Law.
Conclusion
While the answer to Does Stark Law Apply to Physicians Assistants? is usually no, the involvement of PAs in patient care can create scenarios that trigger Stark Law violations. Healthcare organizations must be vigilant in structuring their relationships with PAs and physicians to avoid inadvertent breaches of this complex and consequential law. Understanding these nuances is crucial for ensuring ethical and legal healthcare practices.
Frequently Asked Questions (FAQs)
Can a PA own a diagnostic imaging center that refers patients from their supervising physician’s practice?
Yes, this scenario poses a significant Stark Law risk. If the supervising physician refers patients to the PA’s imaging center, it constitutes a referral from a physician to an entity with which an immediate family member (or even the physician themselves through complex ownership arrangements) has a financial relationship, triggering Stark Law scrutiny.
If a PA orders an MRI for a patient in a hospital owned by a physician, is that a Stark Law violation?
It is more likely that a Stark Law violation exists, if the hospital is billing under the Part A benefit. The critical factor is who is making the referral to the hospital. If the physician (or a member of his/her immediate family) owns the hospital, then Stark law would likely come into play, and the compensation arrangement must be evaluated.
Does the Stark Law apply to referrals for services provided by PAs themselves?
Generally, no. The Stark Law focuses on referrals for designated health services, not necessarily on the person providing the DHS. However, it is essential to remember that a referral still must originate from a doctor who does not have a financial interest.
What is the difference between the Stark Law and the Anti-Kickback Statute?
The Stark Law is a strict liability statute, meaning intent is not a factor. If a prohibited financial relationship exists and a referral for DHS is made, a violation occurs. The Anti-Kickback Statute requires intent to induce or reward referrals and is a criminal statute, while the Stark Law is a civil statute.
How can a healthcare provider ensure their PA compensation arrangements comply with the Stark Law?
Ensure that the PA’s compensation is at fair market value for the services provided, that it is commercially reasonable, and that it is not tied to the volume or value of referrals from the physician or the PA. Document the basis for the compensation to demonstrate compliance.
Are there any safe harbors under the Stark Law that protect arrangements involving PAs?
Yes, the bona fide employment exception is a common safe harbor. However, it requires that the PA is a legitimate employee and that their compensation meets specific requirements.
What happens if a Stark Law violation is discovered?
Penalties for Stark Law violations can be severe, including significant fines, exclusion from federal healthcare programs, and repayment of improperly received payments. The exact consequences depend on the nature and extent of the violation.
Does the Stark Law apply to services paid for by private insurance?
The Stark Law applies only to services paid for by Medicare and Medicaid. However, many states have similar laws that apply to services paid for by private insurance. These laws may be referred to as mini-Stark laws.
How often should healthcare organizations review their Stark Law compliance policies?
Healthcare organizations should review their Stark Law compliance policies at least annually, and more frequently if there are changes in regulations, business arrangements, or referral patterns.
If a PA owns a physical therapy practice that is located in the same building as their supervising physician’s office, is that a Stark Law concern?
Potentially, yes. If the physician refers patients to the PA’s physical therapy practice, it could trigger a Stark Law violation. Proximity alone doesn’t cause a problem, but financial relationships coupled with referrals do.
Does the Stark Law apply to volunteer PAs?
The Stark Law primarily concerns financial relationships and referrals for DHS. While a volunteer PA may not receive direct compensation, the organization should still review the situation to see if any kind of remuneration has taken place.
What documentation is necessary to demonstrate compliance with the Stark Law when employing a PA?
Thorough documentation is critical. This includes the employment contract, documentation of the PA’s qualifications, records of the services performed, documentation supporting the fair market value of the compensation, and records of any referrals made by the PA or the supervising physician.