Draconian Penalties

With its various permutations and hundreds of pages of accompanying commentary, the Stark Law has been cited by legal experts as one of the most complex rules in healthcare history. But as complicated and frustrating as compliance may be, the penalties for violating the Stark Law are far worse.

If, for example, a CME course worth $50 takes a physician over the nonmonetary compensation limit and the course doesn't meet any other exceptions, that $50 could potentially cost the hospital millions, says Lundy. That's because the physician is then prohibited from making any referrals for designated health services under the Stark Law to the hospital for at least the next year, meaning the hospital cannot bill Medicare or Medicaid for any services resulting from the physician's referrals. Those costs “could be astronomical, plus there are potential fines and penalties,” says Lundy.

While the government has not been particularly focused on enforcement of the Stark Law as a stand-alone issue, instead going after Stark violations as part of other investigations, that's starting to change, says Lundy. “We expect to see more [enforcement] over the next several years,” he says — and that includes a crackdown on CME violations.

In fact, just as the feds have scrutinized pharmaceutical companies' relationships with physicians in past years, they may now widen that focus to include hospitals. CMS is in the process of sending out a survey to approximately 500 hospitals asking about their relationships with doctors, Lundy says. “CMS is not a stranger to the various types of lavish holiday parties and doctor days and gifts to medical staff that go on — and some of those may violate the Stark Law.”

On Call

At press time, we were waiting for comment from the Centers for Medicare and Medicaid Services and additional outside legal experts about how providers can structure CME to comply with Stark. We will offer further analysis in future issues.

If your hospital has developed strategies for compliance with Stark, or you have questions or comments, please e-mail Editor Tamar Hosansky at thosansky@meetingsnet.com. For more background, visit meetingsnet.comand search for “Stark Raving Mad.”