General Surgery Coding Alert

Question: If a few surgeons from our practice were to open an outpatient clinic for colonoscopy, would they be subject to the Stark law, and if so, what does that mean?

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Answer: For a specific answer regarding your situation, you would need to consult legal counsel, but the Physician Self-Referral (Stark) Law would probably come into play in such a situation.

In general, the Stark law prohibits physicians from making referrals to certain designated health services (DHS) payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership, investment, or compensation), unless an exception applies. The law also prohibits the entity from presenting claims to Medicare (or billing another individual, entity, or third-party payer) for those referred services.

One of the categories considered a DHS for purposes of the Stark law is inpatient and outpatient hospital services, which would include a center established for colonoscopy services. If the surgeons have a financial relationship with such a center, they could not refer patients to that center of bill Medicare for any such services performed at the center.