07/17/2025    George A. Cioe

Is This a Stark Law Violation? (Scott T Grodman, DPM)

Short Answer: While the Stark Law may not directly
apply due to the lack of Medicare reimbursement
for the compounds in question, EBM Medical’s
reimbursement model may violate the Anti-Kickback
Statute, state laws, and podiatric ethical
guidelines, including those set forth by the
American Podiatric Medical Association (APMA).

Legal Considerations

1. Stark Law (42 U.S.C. § 1395nn)
The Stark Law prohibits physicians from referring
Medicare or Medicaid patients for "designated
health services" to entities with which they or
immediate family members have a financial
relationship—unless an exception applies.

• Limitation: Since the compounds offered by EBM
Medical are not covered by Medicare, and
physicians are paid directly by patients, Stark
Law does not directly apply to this arrangement.
2. Anti-Kickback Statute (42 U.S.C. § 1320a–7b)
The federal Anti-Kickback Statute (AKS) prohibits
offering, soliciting, or receiving any
remuneration to induce or reward referrals for
services reimbursed by federal healthcare
programs.

• Even if patients are paying out of pocket, if
any federal reimbursement is involved (e.g., for
other services) or if the payment influences
prescribing behavior, it may violate AKS.

• This is a criminal statute with significant
penalties, and intent is key.

3. Michigan State Law

Michigan’s Health Care False Claim Act (MCL
752.1001 et seq.) and other state-level
professional conduct rules may apply more broadly
to arrangements where physicians are financially
incentivized to steer patient care.

Medical Ethics and APMA Standards

The American Podiatric Medical Association (APMA)
provides ethical guidance in its Code of Ethics,
especially under:

Article III – Professional Relationships

“The podiatric physician shall not accept rebates
or other inducements for referrals, and shall not
offer such inducements to others.”

This directly speaks to the risk inherent in a
compensation model where EBM reimburses
podiatrists based on prescriptions or referrals.

Article IV – Professional Fees

“The podiatric physician shall not engage in fee-
splitting, or accept rebates in any form for
patient referrals.”

If EBM Medical’s payments are tied to the volume
or nature of prescriptions, this could be
considered fee-splitting or rebating, both of
which are expressly prohibited by APMA ethical
rules.

Conclusion and Recommendation

While Stark Law may not be the applicable statute,
the Anti-Kickback Statute, state law, and APMA
ethical codes all raise red flags regarding the
legality and propriety of participating in EBM
Medical’s reimbursement program.
Dr. Grodman should consult with legal counsel and
a compliance officer before engaging with EBM
Medical, to ensure full alignment with:

· Federal and state law,
· The APMA Code of Ethics,
· His fiduciary duty to patients.

Such arrangements must not compromise clinical
judgment or appear to prioritize financial gain
over ethical patient care.

George A. Cioe, President and CEO, The Tetra
Corporation

Other messages in this thread:

---

07/17/2025    Allen M. Jacobs, DPM

Is This a Stark Law Violation? (Scott T Grodman, DPM)

My patients have overwhelming benefitted from the
utilization of EBM products for a variety of
pathologies and have done so for many years now.
The EBM working model is a variation of that
already utilized for those who dispense needed
products from their office. Typically, with non-
EBM products you purchase an inventory for the
office and dispense from that inventory when
appropriate for patient care. You likely charge
the patient a fee for that product in excess of
your cost, thus creating a profit.

You engage in a similar but more beneficial
relationship with EBM. First, you purchase no
inventory and make no investment. They act as your
inventory so to speak. If you prescribe a product,
they dispense that product to the patient. The
price for dispensing is determined by you alone.
You may elect to charge only the cost of the
product in which case there is no profit for you.
Or you may elect to dispense the product at a
price determined by you, which would include your
profit. EBM charges the actual cost of the
product, and in addition will collect any profit
you have added to that, which is immediately
forwarded to you.

Another advantage of EBM is that the products
cover a wide variety of pathologic conditions
which we see daily. It is not just products for
neuropathy, pain, dermatologic disorders, plantar
fasciitis, plantar, fibromatosis, wound care, but
rather a variety of useful products. I would
estimate that approximately 50% of my patience are
prescribed EBM products at one time or another.

For various conditions, they offer multiple
product options. When you purchase inventory, you
feel compelled to move that inventory, intend to
restrict treatment to the products which you have
purchased. With EBM, you have your choice of
several different products for each condition and
therefore you are not restricted to the old “if
all you have is a hammer everything looks like a
nail” philosophy of dispensing to move your
inventory.

The most important aspect of this all is that over
many years I have found their products to be
extremely effective. Patient benefit greatly from
a clinical perspective.

Additionally, the revenue which you can generate
by having a variety of products available to
dispense for a variety of pathologic states is
very beneficial financially. All of this with no
cash out or commitments whatsoever.

PM magazine addresses the business of podiatry. I
am not a business expert, but I know the benefits
that these products have brought to me
financially. In my opinion, it is a perfect model
for legitimate prescribing and dispensing of
products.

I am not employed by EBM. I have lectured several
times in the past and endorse their products based
upon my experience with them. There are no
kickbacks. There are no inducements for use of
their products. It is a convenient way and
effective means to dispense products which you are
already doing.

Allen M. Jacobs, DPM, St. Louis, MO

---

07/14/2025    Joseph Borreggine, DPM

Is This a Stark Law Violation? (Scott T Grodman, DPM)

The following is posted on EBM’s Website
http://podiatrym.com/go.cfm?n=14647

Why is EBM Medical’s business model not implicated
by Anti-Kickback Statutes or Stark Laws?
The Anti-Kickback Statute [42 U.S.C. § 1320a-
7b(b)] prohibits the knowing and willful payment
of “remuneration” to induce or reward patient
referrals or the generation of business involving
any item or service payable by the Federal
healthcare programs (e.g., drugs, supplies, or
health care services for Medicare or Medicaid
patients). Similarly, the Physician Self-Referral
Law, commonly referred to as the Stark law [42
U.S.C. § 1395nn], prohibits physicians from
referring patients to receive “designated health
services” payable by Medicare or Medicaid from
entities with which the physician or an immediate
family member has a financial relationship, unless
an exception applies.

In both instances, the application of the Anti-
Kickback Statute and the Stark Law is predicated
on a health service that is covered and reimbursed
by a federal healthcare program. Because the
products available through EBM Medical’s
proprietary software platform are not covered by
federal healthcare program and EBM Medical does
not receive any payments from federal healthcare
programs, EBM Medical’s business model does not
implicate federal healthcare fraud and abuse laws,
as EBM Medical does not provide services to
Federal program patients. All products and
therapies available using EBM Medical’s software
platform are “cash-only.”

EBM Medical takes proactive steps to ensure that
every product offered through the EBM Medical
software platform is not reimbursed, and cannot be
reimbursed, by any federal, state, military, or
private insurance. An additional reason EBM
Medical’s business model is not implicated by
Anti-Kickback Statutes or Stark Laws is because
EBM Medical does not make any payment of
“remuneration” to induce or reward patient
referrals. EBM Medical sells products to providers
at a wholesale price, and those providers
independently decide to resale those products to
patients at a retail price which the provider, not
EBM Medical, sets. EBM Medical does not offer any
rebates, payments, commissions, bonuses, or split-
fee arrangements to providers, patients,
pharmacies, or suppliers to utilize EBM Medical’s
software platform or otherwise to induce or reward
patient referrals.”

Joseph Borreggine, DPM, Fort Myers, FL