How does the Stark Law apply in the state of Iowa?

The Stark Law in Iowa

The Stark Law applies in Iowa as a federal law that prohibits physicians from referring Medicare patients for designated health services to entities with which they have a financial relationship, unless that relationship meets specific exceptions. 1, 2

Overview of the Stark Law

• The Stark Law originated with "Stark I" in 1989, which prohibited physician referrals of Medicare patients for clinical laboratory services to entities with which the physician had a financial relationship 3
• "Stark II" expanded in 1993 to include additional "designated health services" including radiology and imaging services, clinical laboratory services, and other specific medical services 1
• The law applies regardless of intent (unlike anti-kickback statutes) - any financial relationship is illegal unless specifically excepted by statute 3

Key Definitions Under Stark Law

• Referral: Broadly defined to include any request by a physician for an item or service; a service is not considered "personally performed" if provided by employees, contractors, or group practice members 1
• Financial relationship: Includes ownership, investment interest, or compensation arrangements that can be direct or indirect 1
• Designated health services: Include radiology and imaging services (CT, MRI, ultrasound, nuclear medicine), clinical laboratory services, and other specific medical services 1

Exceptions Relevant to Iowa Physicians

1. In-office ancillary services exception 1:

   • Allows group practice members to refer patients to their own group for designated health services
   • Requirements include:
     • Group practice must meet Stark's definition of a "group practice"
     • Services must be supervised by referring physician or group practice member
     • Services must be provided in the same building as the practice offices or in a building used exclusively by the group

2. Physician services exception 3:

   • Covers services rendered in an intragroup referral setting

3. Personal services arrangement exception 3:

   • Applies to legitimate service arrangements like medical directorships

4. Fair market value exception 1:

   • Covers services provided at demonstrable fair market value
   • Cannot be based on volume or value of referrals

Location Requirements for Services

• Services must be furnished either 1:

  • In the same building as the offices of the practice, or
  • For group practices, within another building owned/leased by the group on a full-time basis (24/7) and used exclusively by the group

• The "same building" criteria generally requires 1:

  • The building is the principal place of practice for the referring physician, or
  • The referring physician practices medicine at least one day per week in that building

Supervision Requirements

• CT scans without contrast media require "general supervision" (physician doesn't need to be in the office suite) 1
• CT scans with contrast media typically require "direct supervision" (physician must be in the office suite but not necessarily the same room) 1

Penalties for Violations

• Refunds to the Medicare program 1
• Civil monetary penalties up to $15,000 per service 3
• Possible exclusion from Medicare and Medicaid programs 1, 3

Common Pitfalls to Avoid

• Indirect financial relationships that may trigger Stark sanctions 1
• Split interpretation arrangements without proper compensation structures 1
• Failure to meet supervision, location, and billing requirements for in-office services 1
• Self-referrals that could create pressure to interpret results outside one's expertise 2

Special Considerations for Iowa Practices

• While the Stark Law is federal legislation, Iowa physicians must comply with both federal regulations and any additional state-specific requirements 2
• Practices should establish clear policies and procedures to ensure compliance 1
• Expert legal advice is strongly recommended when establishing practice arrangements that might implicate Stark Law provisions 3, 4