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Stark Law

The Stark law, 42 U.S.C. §1395nn, is also known as the Physician Self-Referral Law. The Stark law acts to sanction improper physician referrals, and does so by providing penalties for illegal referrals prospectively. Analysis of the conduct of the defendants under the Stark Law requires three steps. First, is there a physician referral for a designated health service? Second, if the answer to the first question is “yes,” the court must ask: Does the referring physician have a financial relationship with the entity furnishing the designated health service? If the answer to the second question is also “yes,” then the court gets to the third question: If there is a financial relationship, does an exception apply? If no exception applies, the statute is violated.

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