The Stark Law is a federal law that prohibits physicians from making referrals for certain designated health services to entities in which they or their family members have a financial interest. One specific aspect of the Stark Law is the Personal Services Agreement, also known as PSA.
A PSA is a written agreement between a physician and a healthcare entity, such as a hospital or medical group, where the physician provides certain services to the entity. This may include consulting services, administrative services, or other non-clinical duties. These agreements must be in writing, signed by both parties, and specify the services to be provided, the term of the agreement, and the compensation to be paid.
One of the key requirements of a PSA under the Stark Law is that the compensation paid to the physician must be fair market value for the services provided. This means that the payment cannot be more than what another physician would be paid for similar services in the same geographic area. The compensation must also be consistent with the actual services provided and not based on the volume or value of referrals made by the physician.
PSAs must also meet certain documentation requirements. The agreement must be in writing and specify the services to be provided. It must also be signed by both parties, and any changes to the agreement must be in writing and signed by both parties as well. Additionally, the agreement must be reviewed periodically to ensure that the compensation remains consistent with fair market value.
There are some exceptions to the Stark Law that allow for PSAs that do not meet all of the requirements. For example, the “isolated transactions” exception allows for one-time or infrequent agreements that do not exceed a certain monetary threshold. There is also an exception for agreements with rural providers that allows for compensation that is less than fair market value.
In summary, PSAs are an important aspect of the Stark Law that governs physician referrals. These agreements must be in writing, specify the services to be provided, and meet certain compensation and documentation requirements. Healthcare entities must be aware of these requirements to ensure compliance with the Stark Law.