New Stark Rules for Physician Compensation Within Group Practices

Oct 06, 2021 at 10:11 am by admin


New Stark Law rules governing physician compensation within group practices go into effect on January 1, 2022.  Physician groups should be close to finalizing a review of their compensation policies to make sure they are compliant by January 1, 2022. 

On November 20, 2020, the Department of Health and Human Services (HHS) issued a sweeping set of final rules to revise regulations under the federal physician self-referral law, commonly referred to as the Stark Law. The Stark Law prohibits a physician from referring a patient to an entity with which the physician (or an immediate family member) has a financial relationship, for the furnishing of designated health services (DHS) for which payment may be made under the Medicare program, unless an exception applies. DHS includes, among other services, lab, imaging, physical therapy, DME and outpatient prescription drugs. Physician practices primarily rely on the Stark Law's in-office ancillary services exception to protect DHS referrals within the practice. Significant changes/clarifications to the in-office ancillary services exception were included in the final rules.

Important details about Physician Compensation Under the New Stark Law:

The in-office ancillary services exception is an extremely long, detailed and complex exception to the Stark law. This article only discusses a single element of the in-office ancillary services exception. Despite the complexity of the law, the Stark Law is a strict liability statute and violations and/or alleged violations can lead to significant penalties and/or government and whistleblower actions. Physician groups should promptly work to review their compensation arrangements with trusted advisors to ensure that any needed changes to compensation policies can be adopted and implemented prior to the January 1, 2022 compliance date.


The opinions expressed in this article are intended for general guidance only. They are not intended as recommendations for specific situations. As always, readers should consult a qualified attorney for specific legal guidance.

Denise Burke is a partner with Waller Lansden Dortch & Davis, LLP who provide legal counsel to the healthcare industry. She can be reached at denise.burke@wallerlaw.com.

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