How does Stark Law address physician referrals to designated health services?

• A. It prohibits physician ownership in DHS
• B. It requires all referrals to be to DHS
• C. It restricts referrals to DHS where the referring physician has a prohibited financial relationship, unless an applicable exception is satisfied
• D. It only applies to inpatient services

Answer: (C)

Stark Law focuses on self-referral: it restricts referrals for designated health services to entities with whom the referring physician (or their immediate family) has a financial relationship that is prohibited, unless an applicable exception applies. This means the key issue is not simply that a physician has some financial tie, but whether that tie falls within one of the law’s safe harbors or exceptions, which would allow the referral to proceed without implicating the statute. DHS cover many services—imaging, laboratory, certain therapies, and more—so the rule is about referrals to those services when there’s a financial connection, not about all referrals or only inpatient care. For example, if a physician owns a stake in an imaging center and refers Medicare patients to that center, the referral could violate Stark unless the arrangement fits an exception (such as a compliant compensation or rental arrangement, or other specific safe harbors). The other options aren’t correct because the law does not categorically prohibit physician ownership, it does not require all referrals to be to DHS, and it applies to DHS beyond just inpatient services.