Health-care anti-referral laws

Effective January 1, 1995, amendments to Section 1877 of the Medicare Act, commonly known as the Stark law after Congressional sponsor Pete Fourtney Stark, prohibit physicians from referring Medicare or Medicaid patients to healthcare providers with which they have a financial relationship unless an exception under the law applies. Accountants for physicians or other healthcare practitioners or providers are in a unique position to identify a potential referral problem and call it to their attention. A growing number of states have enacted some form of anti-referral law and the trend appears to be continuing. After considering the impact of the Federal Stark law, it is imperative to determine if a state referral law is also applicable and to assess its impact on the client's referral practices. Highlights of the anti-referral laws adopted by New York, New Jersey and Connecticut are presented.