Many healthcare employers may want to incentivize or compensate their employees for referring patients to or generating business for the employer, but they (appropriately) fear application of the federal Stark law or AntiKickback Statute. As explained more fully below, however:

• Stark only applies to payments to physicians (or the physician’s immediate family members) if the physician refers certain designated health services payable by Medicare or Medicaid; it does not apply to referrals by non-physicians, nor does it apply to referral-based compensation arrangements involving non-DHS referrals.

• The Anti-Kickback Statute contains an exception that permits referral-based compensation to bona fide employees for legitimate services payable by federal healthcare programs.