Stark Law Violation: What Counts, Penalties, and Examples

The Stark Law — formally the physician self-referral law — bars physicians from referring Medicare patients for designated health services to entities with which they have a financial relationship, unless a regulatory exception applies.

Unlike the Anti-Kickback Statute, Stark is a strict liability civil law. Intent to defraud is not required. If the referral arrangement does not fit an exception, each claim paid by Medicare for those services can be improper.

A physician who owns an imaging center and refers Medicare patients there without meeting the in-office ancillary services exception may violate Stark. So can a hospital that pays a doctor above fair market value specifically to generate referrals, or a group practice that shares profits in ways that reward volume rather than services actually performed.

Documentation that looks compliant on paper but does not match how the arrangement works in practice is a recurring theme in government investigations.

Stark violations can trigger civil monetary penalties, repayment obligations, and exclusion from federal programs. When claims are submitted to Medicare or Medicaid after a prohibited referral, those claims may also be false under the False Claims Act — opening the door to qui tam lawsuits and treble damages.

Compliance officers, billing staff, and physicians who see referral arrangements that do not match their exception files — or that exist mainly to capture Medicare volume — may have information worth discussing with counsel experienced in healthcare fraud. This article is general information, not legal advice.