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The Physician Self-Referral Law, 42 U.S.C. § 1395nn (the “Stark law”) is a federal health care fraud and abuse law that prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which they (or an immediate family member) has a "financial relationship,” unless the requirements of an applicable exception are satisfied. The law also prohibits the entity from filing claims with Medicare (or billing another individual, entity, or third-party payor) for designated health services furnished pursuant to a prohibited referral. The term “financial relationship” includes any direct or indirect ownership or investment interest by the referring physician in the entity or a compensation arrangement with the entity. The Office of the Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS) can pursue a civil action against Stark Law violators under the civil monetary penalties law. Stark Law violations can result in penalties of up to $15,000 for each billed service that is based on a prohibited referral, plus three times the amount of the government overpayment.
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