Stark Law

What Is the Stark Law?

The Stark law was enacted in 1989 to prevent doctor self-referrals for clinical laboratory services. Since then, it has expanded to cover all types of medical providers and any entity that provides healthcare services. Physicians who violate the law may face fines, suspension or revocation of their license, or criminal charges.

The Stark Law ensures that doctors recommend patients for treatment or services based on the patient's health rather than financial considerations. When doctors or other healthcare providers receive a financial incentive for referring patients to a specific hospital, laboratory, or other healthcare provider, they are rewarded for sending patients for treatments that may not be medically necessary. This can harm the patient and even cost the federal government money that could have been used for medical procedures that are actually necessary. 

What are the Basics of the Stark Law?

Physicians must disclose relationships with any entity that provides healthcare services to Medicare/Medicaid beneficiaries. These entities include hospitals, medical groups, HMOs, insurance companies, pharmaceutical manufacturers, etc. If the physician receives payment directly from the entity, they must report it. If the physician receives payments through a third party (such as a hospital), they must notify those payments if they exceed $10,000 annually.

What are Designated Health Services under the Stark Law?

Designated health services include durable medical equipment (DME), prosthetics, orthotics, and supplies; outpatient drugs and biological products; emergency department care; hospital inpatient care; laboratory tests; x-rays; physical therapy; speech pathology; audiology; chiropractic services; massage therapy; acupuncture; and dental services. Reporting lab fraud is essential in upholding the integrity of medical testing and ensuring the accuracy of healthcare diagnoses and treatments.

Does the Stark Law Apply to All Healthcare Referrals?

Yes. The Stark Law applies to any referral made by a physician to another provider (including hospitals) for designated health services covered by Medicare or Medicaid. Whether the provider receiving the referral pays for the service directly or indirectly through a third party, it does not matter.

What are the Penalties for Violating the Stark Law?

If you violate the Stark Law, you could face fines of $100,000 per violation and prison sentences of up to 5 years.

How can I become a Stark Law Whistleblower?

Under the False Claims Act, Whistleblowers can report violations of the Stark Law by reporting the suspected violation and be rewarded up to 30% of the government’s recovery.

Physicians and healthcare providers, such as hospitals, who violate the Stark Law can be sued under the False Claims Act by the government and whistleblowers. The False Claims Act allows the government to recoup funds spent on claims that were made in violation of the Stark Law.


Physicians who self-refer may be subject to penalties if they don't disclose all relevant information about the entity paying them. They must also comply with any applicable laws regarding conflicts of interest.

  • What is the Stark Law?

The law prohibits physicians from referring patients to receive "designated health services" payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship.

  • Can I be a whistleblower for a Stark Law violation?

Yes, you can report a violation under the False Claims Act.

  • How much can a whistleblower be awarded?

The whistleblower can be rewarded up to 30% of the government’s recovery.

Do You Have a Stark Law Whistleblower Violation to Report? 

Physicians should not refer patients to any entity with a financial interest, including ownership interests, equity interests, employment, consultancies, honoraria, stock ownership, or similar interests. This includes relationships with pharmaceutical companies, medical device manufacturers, hospitals, professional associations, and health plans.

If you have a suspected Stark Law Violation to report, please call The Whistleblower Advocates at (833) 310-3147 for a FREE, confidential consultation.

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