Fast Break: Stark Lessons for Physician Practice Acquisitions

The Stark Law's prohibition on physician self-referrals governs how physicians can be compensated for their provision of ancillary services (e.g., clinical lab services, diagnostic imaging, physical therapy, durable medical equipment, outpatient prescription drugs). Noncompliance with the Stark Law has the potential to result in False Claims Act liability and significant financial consequences. Healthcare investors and physicians interested in selling their practices should carefully scrutinize Stark Law compliance during diligence, as well as ensure that any future physician compensation arrangement is structured to be compliant with the law.

In this installment of Fast Break, we will explore the challenges physician practices face with Stark Law compliance, including satisfying the requirements of the in-office ancillary services exception and physician compensation arrangements.

Topics will include:

• What is the Stark Law and what kind of arrangements does it apply to? 
• What are common mistakes physician practices make with respect to Stark Law compliance? 
• How can physicians and their operational partners structure compensation arrangements to reduce compliance risks but remain competitive in the marketplace? 
• What does enforcement of Stark Law violations look like and what are the ramifications for noncompliance? 
• What should physicians, buyers, and investors consider when making a self-disclosure to CMS as a component of a practice acquisition?

This is the first half of our two-part series on Stark Law issues. Be sure to join us in September for Stark Lessons II: Hospital-Physician Arrangements. Details to follow!