Self-Referral Laws (Stark)
Purpose
The federal Physician Self-Referral Law (the Stark Law) prohibits physicians from referring Medicare patients for designated health services to entities with which the physician, or an immediate family member, has a financial relationship, unless an exception applies. ABAS has no physicians on employees, and ABA therapy is not a designated health service, so ABAS's direct exposure under the Stark Law is limited. This policy exists so that ABAS recognizes the situations in which a Stark obligation could attach, in particular before entering any financial relationship with a referring physician or expanding into new service lines, and structures those arrangements lawfully.
Scope
This policy applies to all ABAS employees. It applies in particular to the Executive Director, the Director of Operations, the Billing & Recovery Specialist, and the Compliance Officer, because these are the roles that evaluate, negotiate, approve, or bill under arrangements with outside providers and referral sources. It covers any actual or proposed financial relationship between ABAS and a physician, or a physician's immediate family member, and any planned change to ABAS services or payer enrollment that could bring the organization within the reach of the Stark Law.
Definitions
| Term | Definition |
|---|---|
| Physician | A doctor of medicine or osteopathy, dentist, podiatrist, optometrist, or chiropractor. ABAS clinicians (BCBAs and Behavior Technicians) are not physicians under the Stark Law. |
| Designated Health Services (DHS) | The specific service categories the Stark Law covers, including clinical laboratory services, physical and occupational therapy, outpatient speech-language pathology, imaging, durable medical equipment, home health services, outpatient prescription drugs, and inpatient and outpatient hospital services. ABA therapy is not a designated health service. |
| Financial Relationship | Any ownership or investment interest in an entity, or any compensation arrangement with an entity, whether direct or indirect. This includes employment, contracts for services, leases, and payments of any kind between ABAS and a physician. |
| Referral | A physician's request for, ordering of, or certification of the need for a service, including a plan of care that includes the service. |
| Immediate Family Member | A physician's spouse, parent, child, sibling, stepfamily member, in-law, grandparent, grandchild, or the spouse of a grandparent or grandchild. |
| Exception | A statutory or regulatory safe zone (for example, fair market value compensation or personal service arrangements) that permits an otherwise prohibited referral when every requirement of the exception is met. |
Policy Statement
5.1 How the Stark Law Applies to ABAS
The Stark Law applies when a physician refers a Medicare patient for a designated health service to an entity with which the physician or an immediate family member has a financial relationship. A companion Medicaid provision (42 U.S.C. § 1396b(s)) denies federal matching payment to the state Medicaid program for designated health services furnished under a referral that Stark would prohibit. ABAS provides ABA therapy, which is not a designated health service, employs no physicians, and is paid by public healthcare programs, principally MassHealth, for its publicly funded services. ABAS's direct exposure is therefore limited, and this policy does not impose obligations that do not apply to the organization. Compliance Officer review under this policy is required when ABAS enters a financial relationship with a physician, and Stark obligations themselves attach only if ABAS also furnishes designated health services billable to Medicare or Medicaid.
5.2 Prohibition
ABAS will not enter into any financial relationship with a physician, or with a physician's immediate family member, until the Compliance Officer has reviewed the arrangement and confirmed in writing that it either falls outside the Stark Law or meets every requirement of an applicable exception. Where an exception is relied on, the arrangement must be in writing, signed by both parties, set compensation in advance at fair market value, and not take into account the volume or value of any referrals.
5.3 Triggering Events
The following situations require Compliance Officer review under this policy before ABAS commits to them:
- Hiring or contracting with a physician in any capacity, including as a medical director, consultant, or trainer.
- Paying a physician or a physician's immediate family member for anything, including rent, equipment, marketing, or services, or receiving such payments from them.
- Any ownership or investment interest in ABAS held by a physician or a physician's immediate family member.
- Expanding ABAS services into a designated health service category, such as speech-language pathology or occupational therapy.
- Enrolling ABAS as a Medicare provider or supplier.
5.4 Strict Liability and Relationship to the Anti-Kickback Statute
The Stark Law is a civil statute that applies regardless of intent. If a financial relationship exists and no exception is met, the referral and the resulting claims are prohibited even if no one intended to break the law. The Stark Law and the federal Anti-Kickback Statute are separate laws with separate requirements: an arrangement must satisfy both, and compliance with one does not establish compliance with the other. The anti-kickback requirements in POL-004, Section 5.4 apply to every arrangement reviewed under this policy.
5.5 Consequences
Violations can result in denial of payment, an obligation to refund amounts collected, civil monetary penalties, liability under the False Claims Act, and exclusion from federal healthcare programs. Because Stark liability does not require intent, ABAS treats the review required by Section 5.2 as mandatory, not advisory.
Procedures
Responsibilities
| Role | Responsibility |
|---|---|
| All ABAS Employees | Do not commit ABAS to any arrangement with a physician or referral source. Route inquiries from physicians about business or financial arrangements to the Director of Operations or the Compliance Officer. |
| Director of Operations | Identify proposed arrangements with outside providers and referral sources and submit them to the Compliance Officer before any commitment is made. |
| Billing & Recovery Specialist | Flag any claim, payer enrollment, or service change that involves Medicare or a designated health service category and escalate it to the Compliance Officer. |
| Compliance Officer | Review proposed financial relationships with physicians, document the analysis and conclusion, maintain arrangement records, and report review activity to the Compliance Committee. |
| Executive Director | Approve physician arrangements only after Compliance Officer review, and approve any engagement of outside counsel for Stark questions. |
Steps
- Before ABAS enters any financial arrangement with a physician or a physician's immediate family member, the Director of Operations (or the Executive Director) submits the proposed terms to the Compliance Officer.
- The Compliance Officer determines whether the arrangement creates a financial relationship under the Stark Law and, if so, whether an exception applies. Questions the Compliance Officer cannot resolve are referred to outside counsel with the Executive Director's approval, consistent with POL-003.
- If the arrangement proceeds, it is documented in a written agreement that meets the requirements of Section 5.2 before any payment is made or any referral is accepted under it.
- The Compliance Officer retains the written analysis and the signed agreement for the duration of the arrangement plus six years.
- The Compliance Officer re-reviews any active physician arrangements annually, and reviews this policy whenever ABAS plans a new service line, a new payer enrollment, or a transaction involving physician ownership.
Training Requirements
All ABAS employees receive awareness training on referral laws, covering the Stark Law together with the Anti-Kickback Statute, during onboarding and at least annually as part of compliance refresher training. The Executive Director, Director of Operations, Billing & Recovery Specialist, and Compliance Officer receive role-specific training on recognizing the triggering events in Section 5.3 and on the review process in Section 6. The Compliance Officer tracks completion and reports it to the Compliance Committee as part of regular compliance reporting.
Reporting and Enforcement
Employees who become aware of an arrangement with a physician or referral source that has not been reviewed under this policy, or who suspect a violation, must report it through the channels described in POL-003 (Compliance Reporting, Investigation, and Resolution), including the anonymous web form and the compliance ticketing system. Reports are investigated under POL-003 and its Compliance Ticket Management SOP. A confirmed violation may result in restructuring or unwinding the arrangement, refunding affected payments, disclosure to payers or government agencies where required by law, and corrective action up to and including termination. ABAS will not retaliate against any person who reports a concern in good faith.