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Stark General Exception

A. Services furnished by an organization (or its contractors or subcontractors) to enrollees of certain Medicare prepaid plans, certain Medicaid prepaid plans, and HMOs qualified under the Social Security Act.

B. Compensation pursuant to a risk-sharing arrangement (including, but not limited to, withholds, bonuses and risk pools) between a physician and a health plan, insurance company, HMO or independent physician’s association (either directly or through a subcontractor) for services provided to enrollees, provided the arrangement does not violate the anti-kickback statute or any laws or regulations governing billing or claims submission.

C. “Physician incentive plan”* (withhold, capitation, bonus, or otherwise) that does take into account volume of referrals if:

1.  no payment induces reducing or limiting medically necessary services;
2.  physician is at financial risk; and
3.  disclosure to Secretary upon request.

* “Physician incentive plan” is defined as “any compensation arrangement between an entity (or downstream contractor[**]) and a physician or physician group that may directly or indirectly have the effect of reducing or limiting services furnished with respect to individuals enrolled with the entity.”

** “Downstream contractor” is defined as “a ‘first tier contractor’ as defined at [42 C.F.R.] § 1001.952(t)(2)(iii) or a ‘downstream contractor’ as defined at [42 C.F.R.] § 1001.952(t)(2)(i).”

10. Managed Care Arrangements

Sources: 42 C.F.R. § 411.355(c), 42 C.F.R. § 411.357(n), and 42 C.F.R. § 411.357(d)(2)

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