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Federal Stark Law Frequently Asked Question Addresses Lithotripsy

Generally speaking, the Federal Stark law makes it unlawful for a physician to refer Medicare or Medicaid patients for designated health services (“DHS”) to an entity with which the physician (or an immediate family member) has a financial relationship, unless an exception applies. The Federal Stark law applies only to referrals of DHS.

Questions can arise when it is unclear whether a service constitutes a DHS under the law. To address one such situation, on January 22, 2009, CMS published a Frequently Asked Question (“FAQ”) regarding lithotripsy services provided “under arrangements” with hospitals. The FAQ specifically asked:

Where a physician-owned lithotripsy partnership contracts with a hospital to provide a lithotripter and skilled technician “under arrangements,” may the hospital pay for such services using a per-use or percentage-based compensation formula without violating the physician self-referral law?

In its answer, CMS explained that lithotripsy is not considered a DHS. As a result, if the physician owners refer to the hospital for lithotripsy services only, the Stark law would not be implicated. If, however, the physician owners of a lithotripsy partnership refer Medicare patients to the contracting hospital for any other DHS service, such as inpatient or outpatient hospital services, the arrangement would fall within the purview of the Stark law.

To access a copy of the FAQ, please click here.

For more information, please call Adrienne Dresevic, Esq. or Carey F. Kalmowitz, Esq. at (248) 996-8510, visit The HLP website’s Stark and Anti-Kickback page, or visit The HLP website.

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