07/04/2025    Joseph Borreggine, DPM

The Stark Law

The recent article on the Stark Law is very
important and informative for all medical
providers to read and ultimately understand with
respect to the day to operations of running a
medical practice, working cooperation as a medical
referral source as well being an employee in a
more than two person (group) medical practice.
This law is meant to not only protect the Medicare
system from fraud and abuse which can be deemed
direct or indirect but also provide government
regulation and guidelines preventing physicians
from being paid inappropriately whether in a small
group or larger corporate practice setting.

I have commented on this subject a while ago in
this publication and did not have one response;
either because 1) every reader was either fully
knowledgeable of what I was talking about or 2)
was completely ignorant of my comments with
respect to payment for “designated health
services” (DHS) in a group practice (more than two
physicians).

This ignorance of which I speak had befallen me.
Until recently, I was employed in a large
corporate group multi-specialty practice. I rather
not re-hash what I said in that article, but I
would like to reiterate that if you are
unknowledgeable of how a physician gets
compensated for DHS in a group setting is rather
eye-opening.

From a “Physician Practice” Feb 2012 says it
plainly about compensation for DHS: “A group
practice may pay a physician in the group a share
of the group’s overall profits from DHS as long as
it is not based on volume or value of referrals. A
common approach used by groups is sharing DHS
equally among all physicians. Other methods
include distribution of profit based on non-DHS
productivity, overall patient encounters, RVUs, or
other methods that do not reflect volume or value
of referrals for DHS.”

Yes, it was hard to accept what I realized was in
employment contract regarding DHS payments after I
received my first quarterly performance report for
collected receivables. Needless to say even after
generating what I thought to a generous amount of
DHS in my office location, I was only paid a very
small percentage for those services since my
collections for my office location were on the low
end compared to other corporate office locations.

Hence, the DHS compensation was divided equally
amongst all the providers, but rather the DHS
compensation was based on percentage of revenue
collected per provider compared to total gross
revenues of the entire corporate practice entity.

I recommend that you seek out a healthcare
attorney prior to signing any employment contract
as a healthcare provider so that it can be fully
reviewed. As a physician dealing with DHS in the
practice as employee it is imperative that you
fully comprehend that what your base salary is and
how it is calculated, deductions regarding
collection fees, and finally bonus compensation
structure after the base is reached and then how
DHS collected revenue after your potential annual
gross compensation.

Joseph Borreggine, DPM, Fort Meyers, FL

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