--- title: "Stark Law, Definition | MedTech Terms" description: "Federal law restricting physician self-referral for designated health services. Plain-English Commercialization definition for MedTech teams, with examples and" lang: en json-ld: | { "@context": "https://schema.org", "@graph": [ { "@type": "DefinedTerm", "@id": "https://medtechterms.com/terms/stark-law#term", "name": "Stark Law", "description": "The physician self-referral law (commonly Stark) prohibits physicians from referring Medicare patients to entities with which they (or immediate family) have a financial relationship for designated health services, unless an exception applies.", "url": "https://medtechterms.com/terms/stark-law", "termCode": "stark-law", "inDefinedTermSet": { "@type": "DefinedTermSet", "name": "MedTech Terms", "url": "https://medtechterms.com/terms" } }, { "@type": "Article", "@id": "https://medtechterms.com/terms/stark-law#article", "headline": "Stark Law", "description": "Federal law restricting physician self-referral for designated health services.", "url": "https://medtechterms.com/terms/stark-law", "mainEntityOfPage": { "@type": "WebPage", "@id": "https://medtechterms.com/terms/stark-law" }, "about": { "@id": "https://medtechterms.com/terms/stark-law#term" }, "articleSection": "Commercialization", "inLanguage": "en", "keywords": "Stark Law, Commercialization, medical device, MedTech", "author": { "@type": "Person", "name": "Christian Espinosa", "jobTitle": "Founder, Blue Goat Cyber", "url": "https://bluegoatcyber.com" }, "publisher": { "@type": "Organization", "name": "MedTech Terms", "url": "https://medtechterms.com" }, "isPartOf": { "@type": "WebSite", "name": "MedTech Terms", "url": "https://medtechterms.com" }, "datePublished": "2026-05-05", "dateModified": "2026-05-05", "citation": [ { "@type": "CreativeWork", "name": "CMS Stark", "url": "https://www.cms.gov/medicare/regulations-guidance/physician-self-referral", "publisher": { "@type": "Organization", "name": "CMS" } }, { "@type": "CreativeWork", "name": "AdvaMed Code of Ethics", "url": "https://www.advamed.org/our-work/code-of-ethics/", "publisher": { "@type": "Organization", "name": "AdvaMed" } }, { "@type": "CreativeWork", "name": "AHRMM - Healthcare Supply Chain", "url": "https://www.ahrmm.org/", "publisher": { "@type": "Organization", "name": "AHRMM" } } ], "mentions": [ { "@type": "DefinedTerm", "@id": "https://medtechterms.com/terms/anti-kickback#term", "name": "Anti-Kickback Statute", "alternateName": "AKS", "url": "https://medtechterms.com/terms/anti-kickback" }, { "@type": "DefinedTerm", "@id": "https://medtechterms.com/terms/asc-shift#term", "name": "ASC Site-of-Service Shift", "url": "https://medtechterms.com/terms/asc-shift" } ] }, { "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://medtechterms.com/" }, { "@type": "ListItem", "position": 2, "name": "Terms", "item": "https://medtechterms.com/terms" }, { "@type": "ListItem", "position": 3, "name": "Commercialization", "item": "https://medtechterms.com/terms?cat=Commercialization" }, { "@type": "ListItem", "position": 4, "name": "Stark Law", "item": "https://medtechterms.com/terms/stark-law" } ] }, { "@type": "FAQPage", "@id": "https://medtechterms.com/terms/stark-law#faq", "mainEntity": [ { "@type": "Question", "name": "What are 'designated health services' under the Stark Law?", "acceptedAnswer": { "@type": "Answer", "text": "Designated health services (DHS) include a range of medical services such as clinical laboratory services, physical and occupational therapy, radiology services (including MRI, CT, and ultrasound), radiation therapy services, durable medical equipment, parenteral and enteral nutrients, prosthetics, orthotics, home health services, outpatient prescription drugs, and inpatient and outpatient hospital services." } }, { "@type": "Question", "name": "What constitutes a 'financial relationship' under the Stark Law?", "acceptedAnswer": { "@type": "Answer", "text": "A financial relationship can be either an ownership or investment interest in an entity, or a compensation arrangement involving remuneration between the physician (or immediate family member) and the entity. This can include direct or indirect relationships." } }, { "@type": "Question", "name": "What are some common exceptions to the Stark Law?", "acceptedAnswer": { "@type": "Answer", "text": "Common exceptions include in-office ancillary services, bona fide employment relationships, personal service arrangements, rental of office space or equipment, and fair market value compensation for physician services. Each exception has specific requirements that must be met to be applicable." } }, { "@type": "Question", "name": "What are the penalties for violating the Stark Law?", "acceptedAnswer": { "@type": "Answer", "text": "Penalties for violating the Stark Law can be severe, including denial of payment, refund of payments received, civil monetary penalties of up to $25,000 per referral, and potential exclusion from participation in federal healthcare programs. Knowingly violating the law can lead to additional penalties." } } ] } ] } --- [ MedTech Terms The authoritative reference ](/) Browse Learn [Latest](/latest) About 1. [Home](/) 2. / 3. [Terms](/terms) 4. / 5. [Commercialization](/terms?cat=Commercialization) 6. / 7. Stark Law [All terms](/terms) Commercialization [Hospital Buyer & Reimbursement](/ecosystems/hospital-buyer) # Stark Law Federal law restricting physician self-referral for designated health services. Reviewed by [Christian Espinosa, Founder, Blue Goat Cyber](/authors/christian-espinosa) Last reviewed May 5, 2026 ## Definition The physician self-referral law (commonly Stark) prohibits physicians from referring Medicare patients to entities with which they (or immediate family) have a financial relationship for designated health services, unless an exception applies. What the regulation says The Stark Law, also known as the physician self-referral law, is a U.S. federal law (42 U.S.C. § 1395nn) that prohibits physicians from referring Medicare or Medicaid patients for certain "designated health services" (DHS) to entities with which the physician or an immediate family member has a financial relationship, unless an exception applies. This regulation aims to prevent conflicts of interest and reduce healthcare costs by eliminating referrals motivated by financial gain rather than patient need. The Centers for Medicare & Medicaid Services (CMS) is responsible for issuing regulations and guidance related to the Stark Law. ## What this means in practice Particularly relevant to physician-owned ASCs, distributorships (PODs in [spine](/terms/spine)), and equipment leasing arrangements. ## Examples - A physician refers a Medicare patient for an MRI to a diagnostic imaging center in which the physician holds a direct ownership stake. - A hospital employs a physician and pays them a salary that includes performance bonuses tied to the volume of referrals for inpatient services at the hospital. - A medical device company provides free office space to a physician in exchange for the physician exclusively prescribing the company's devices to Medicare patients. Common pitfalls - • A common pitfall is misunderstanding the broad definition of "financial relationship," which includes both ownership/investment interests and compensation arrangements. - • Another mistake is failing to document compliance with an applicable exception, as the burden of proof lies with the referring physician or entity. - • Companies often err by not conducting thorough due diligence on potential referral sources, leading to inadvertent violations. - • Assuming that an arrangement is permissible under other anti-fraud statutes, such as the Anti-Kickback Statute, means it will also satisfy Stark Law requirements, which is not always true. - • Failing to regularly review and update compliance programs for Stark Law adherence can result in outdated practices and potential non-compliance. ## Frequently asked questions What are 'designated health services' under the Stark Law? Designated health services (DHS) include a range of medical services such as clinical laboratory services, physical and occupational therapy, radiology services (including MRI, CT, and ultrasound), radiation therapy services, durable medical equipment, parenteral and enteral nutrients, prosthetics, orthotics, home health services, outpatient prescription drugs, and inpatient and outpatient hospital services. What constitutes a 'financial relationship' under the Stark Law? What are some common exceptions to the Stark Law? What are the penalties for violating the Stark Law? ## Related terms Grouped by theme ### Editor's picks · Hand-selected related concepts [ Commercialization Anti-Kickback Statute(AKS) U.S. criminal statute prohibiting remuneration to induce federal healthcare business. ](/terms/anti-kickback)[ Reimbursement ASC Site-of-Service Shift Migration of procedures from hospitals to ambulatory surgery centers. ](/terms/asc-shift) ### More in Commercialization · Same category [ Commercialization AdvaMed Code of Ethics Industry code governing interactions between U.S. medical-device companies and healthcare professionals. ](/terms/advamed-code)[ Commercialization Advisory Board Convening of external experts to advise on strategy or product. ](/terms/advisory-board)[ Commercialization Bottom-Up Market Sizing Building market size from procedure volumes × price × penetration. ](/terms/bottom-up-sizing)[ Commercialization Distributor vs Direct Sales Choice between selling through third-party distributors or hiring a direct salesforce. ](/terms/distributor-direct) Cited by Where this term appears across MedTech Terms. Ecosystems (1) - [Hospital Buyer & Reimbursement](/ecosystems/hospital-buyer) ## Primary references 3 sources Link health: 3 verified · last checked 2026-06-20 CMS· 1 AdvaMed· 1 AHRMM· 1 1. [1 CMS Stark Verified CMS · cms.gov ](https://www.cms.gov/medicare/regulations-guidance/physician-self-referral) 2. [2 AdvaMed Code of Ethics Verified AdvaMed · advamed.org ](https://www.advamed.org/our-work/code-of-ethics/) 3. [3 AHRMM - Healthcare Supply Chain Verified AHRMM · ahrmm.org ](https://www.ahrmm.org/) Inline markers like \[1\] jump to the matching reference above. Sponsor note ### Selling a connected device into health systems? Hospital procurement increasingly requires MDS2, SBOM, and security questionnaires - we help your team answer them confidently. [Book a 30-minute discovery session](https://go.bluegoatcyber.com/meetings/blue-goat-cyber/discovery-session) - No obligation - Expert-led from minute one - NDA available on request MedTech Terms is a community resource sponsored by [Blue Goat Cyber](https://bluegoatcyber.com). Definitions are independent of any vendor. On this term Category Commercialization Sources 3 Updated 5/5/2026 [Compare with another term](/compare?a=stark-law) Learn in 60 seconds Card Lesson Quiz Federal law restricting physician self-referral for designated health services. - · Particularly relevant to physician-owned ASCs, distributorships (PODs in spine), and equipment leasing arrangements. Remember this Watch out: A common pitfall is misunderstanding the broad definition of "financial relationship," which includes both ownership/investment interests and compensation arrangements. Related terms - [Anti-Kickback Statute(AKS) ](/terms/anti-kickback) - [ASC Site-of-Service Shift ](/terms/asc-shift) You may also need Auto-suggested from Commercialization and shared keywords. - [Physician Payments Sunshine Act ](/terms/sunshine-act) - [Medicare Physician Fee Schedule(MPFS) ](/terms/physician-fee-schedule) - [AdvaMed Code of Ethics ](/terms/advamed-code) - [Off-Label Use ](/terms/off-label-use) - [Physician Training and Proctoring ](/terms/training-and-proctoring) - [HIPAA(HIPAA) ](/terms/hipaa) [All Commercialization terms](/terms?cat=Commercialization) MedTech Terms An authoritative, plain-language reference for the regulatory, quality, cybersecurity, and software terms that shape modern medical devices. 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