A 68-year-old woman with Medicare is evaluated by an orthopedic surgeon on the second post-operative day following an uncomplicated total knee arthroplasty. The surgeon is arranging the patient's discharge and writing an order for post-operative physical therapy. The surgeon holds a 20% equity ownership stake in an independent, comprehensive outpatient rehabilitation facility (CORF) located in the patient's community. The surgeon genuinely believes this specific facility offers the highest quality, most specialized joint rehabilitation in the region. The patient asks the surgeon for a recommendation on where to go for physical therapy. Which of the following is the most appropriate action for the surgeon to take?
- Refrain from referring the patient to the owned facility and provide a list of alternative, unaffiliated rehabilitation centersAnswer
- BRefer the patient to the owned facility, ensuring written disclosure of the financial interest and a list of alternative options is provided to the patient
- CRefer the patient to the owned facility, provided the surgeon signs an informal waiver declining any profit distribution generated specifically from this patient's care
- DRefer the patient to the owned facility, provided the surgeon does not receive compensation directly tied to the volume or value of referrals
- ERefer the patient to the owned facility, as long as the facility agrees to waive the patient's Medicare out-of-pocket copayments to demonstrate clear clinical benefit
Answer
Refrain from referring the patient to the owned facility and provide a list of alternative, unaffiliated rehabilitation centers.
The most appropriate action is to refrain from referring the patient to the owned facility entirely and to provide a list of alternative, unaffiliated options. The physician's equity in the rehabilitation facility constitutes a financial relationship. Under the Stark Law (Ethics in Patient Referrals Act), a physician is strictly prohibited from referring a Medicare or Medicaid beneficiary for Designated Health Services (DHS) to an entity with which the physician or an immediate family member has a financial relationship, unless a specific exception applies. Physical therapy is explicitly classified as a DHS. Because this is a strict liability statute, the surgeon's genuine belief in the facility's quality does not override the prohibition.
Step-by-Step Solution
Key Concept
Under the federal Stark Law, a physician is strictly prohibited from referring Medicare or Medicaid patients for designated health services (such as physical therapy) to an entity in which the physician has an ownership or investment interest, regardless of whether the conflict is disclosed to the patient.