In 1989, Representative Fortney “Pete” Stark of California authored H.R. 5198, a bill that proposed to prohibit physician “self-referral” for certain clinical laboratory services. The statutory provisions that passed related to clinical laboratory services became known as “Stark I.” These basic provisions were amended in 1993 in the Omnibus Budget Reconciliation Act of 1993. The amendments extended the referral ban to more physician services. These amendments related to other physician services became known as “Stark II.”
Stark generally prohibits a physician (or an immediate family member of such physician) who has a direct or indirect financial relationship with an entity that provides a designated health service from making a referral for that service for which Medicare or Medicaid would otherwise pay. This very broad prohibition is mitigated by a large number of exceptions. These exceptions must be met exactly. Failure to meet a Stark exception will result in a violation where the other requisites for a prohibited referral are met.
For more information, see these publications in the TMA Education Center:
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