Stark Law

Stark Law Overview

The Stark Law sounds cool because because it has the name Stark in it. Don’t be mistaken, this law has nothing to do with Tony Stark or Iron Man. But that doesn’t mean we can’t pretend it does.

As you probably know, Tony Stark is a genuis, billionaire, playboy, philanthropist. He made his billions in the business of weapons and armory. As a good businessman, you can probably imagine that he would think “I’ve sold you some missiles, why don’t I also sell you a drone to deliver them?” Great idea, right? Right!

What if a health care provider thinks similarly? “I’m already treating physical therapy patients, maybe I should also start a durable medical equipment supplier and send them there too!” Great idea, right! No! At least not without taking a close look at Stark Law.

Stark Law’s Prohibition

Stark Law states that a physician cannot make a referral to an entity that furnishes certain designated health services (DHS) paid for by federal dollars if the physician (or an immediate family member) has a financial interest in that entity. You also cannot present a claim for payment for any services as a result of an improper referral.

Practical Reasons Why You Should Care About Stark Law

I’m not going to say whether Stark Law is a good thing or a bad thing. I will only say that it is a thing. There are several good reasons for following this law:

  1. It’s the law and you want to be a law abiding citizen.
  2. Failing to follow Stark Law can result in substantial fines.
  3. You don’t want to end up in the slammer.
  4. Unaddressed Stark Law problems can ruin your potential business deals.