In addition to their practice, many doctors own a separate, but somewhat associated, business. Some examples of business opportunities for doctors include:

  • Dialysis centers (nephrologists)
  • Outpatient surgical centers (surgeons and anesthesiologists)
  • Endoscopy centers (gastroenterologists)
  • Imaging centers (radiologists)
  • Urgent cares (emergency and primary care physicians)
  • Labs (pathologists)
  • Dental lab (dentists)
  • Supplement business (functional medicine physicians)
  • Practice real estate

Run well, sometimes these businesses provide more income than the doctor’s practice itself. Doctors do need to be aware of the Stark Law, is a set of United States federal laws that prohibit physician self-referral, specifically a referral by a physician of a Medicare or Medicaid patient to an entity for the provision of designated health services (“DHS”) if the physician (or an immediate family member) has a financial relationship with that entity.

The term “referral” means “the request by a physician for the item or service” for Medicare Part B services and “the request or establishment of a plan of care by a physician which includes the provision of the designated health service” for all other services.[1] DHS includes “clinical laboratory services”; “physical therapy services”; “occupational therapy services”; “radiology services, including magnetic resonance imaging, computerized axial tomography scans, and ultrasound services”; “radiation therapy services and supplies”; “durable medical equipment and supplies”; “parenteral and enteral nutrients, equipment, and supplies”; “prosthetics, orthotics, and prosthetic devices and supplies”; “home health services”; “outpatient prescription drugs”; “inpatient and outpatient hospital services”; and “outpatient speech-language pathology services.” A “financial relationship” includes ownership, investment interest, and compensation arrangements.

Stark Law contains several exceptions, including physician services, in-office ancillary services, ownership in publicly traded securities and mutual funds, rental of office space and equipment, and bona fide employment relationship.[1] It is named for United States Congressman Pete Stark (D-CA) who sponsored the initial bill. Also, ambulatory surgical centers are  “safe harbor” exceptions (such as doing 1/3 of cases at that center) that allow physicians to even send Medicare (the only ones the Stark Law applies to) patients there.

1. 42 U.S.C. 1395nn”. U.S. Government Publishing Office. Retrieved 2016-08-30.
2. Kolber, Morey J (2006). “Stark regulation: a historical and current review of the self-referral laws”. HEC Forum. 18 (1): 61–84. doi:10.1007/s10730-006-7988-3.
3. Kusske, John A (2002). “Neurosurgical practice in the current regulatory environment”. Neurosurgical Focus. 12 (4): 1–16. doi:10.3171/foc.2002.12.4.12.