An Interpretation of Anti-Kickback Statue and Stark Law


One of our clients that wishes to remain anonymous asked if we were interested in publishing their interpretation of the anti-kickback statue and stark law. 

Note: This is simply an interpretation and our client is not a healthcare attorney so this should not be considered legal advice or interpretation. 

The pathology laboratory/physician relationship is governed by two dominant federal legal frameworks – The Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (Stark Law)

When a clinician (dermatologist, gastroenterologist, etc.) takes a sample from a patient and sends it to a laboratory for analysis, the clinician is “referring” the sample to the laboratory. In most circumstances, the patients have no say over where the physician refers the sample. The AKS and Stark Laws are in place to prevent fraud and abuse in regards to the referrals and to (in most cases) protect the patient from dubious referral practices that may adversely impact the quality of care. In simple terms, the overall principals of the AKS are that physicians must not be in any way renumerated for referring patient samples to a particular laboratory.  Stark regulates physician self-referrals, and in this context, it establishes strict rules that govern referrals to laboratories owned or partially owned by referring clinicians.  “Remuneration” includes “any payment or other benefit made directly or indirectly, overtly or covertly, in cash or in kind.”

An interface between a Laboratory Information System (LIS) and a clinician’s Electronic Health Record (EHR) system has now become in the industry standard. Interfaces cut down on medical errors, optimize workflows, and they allow for a higher quality of patient care. Since interfaces cost money to build and support, they are considered a benefit of value, and clinical laboratories must exercise caution when providing interfaces to their clinician clients. Fortunately, the Office of Inspector General (OIG) has issued guidance opinions throughout the last 20 years that defines exceptions to these regulations. Generally excluded from remuneration categorization are items, devices, or supplies that are used solely to (1) collect, transport, process, or store specimens for the entity providing the item, device or supply (e.g., specimen collection supplies) or (2) order or communicate the results of tests or procedures for such entity (e.g., an interface). In other words, this exception allows, for example, a laboratory to furnish specimen collection supplies to clients or to provide an interface used exclusively for the ordering of testing from that laboratory and the reporting of its results.

Interface costs between a LIS and an EHR traditionally incur two separate fees. The LIS charges a fee to the laboratory to build their end of a bi-directional interface, and the EHR may charge a fee to the client to configure or integrate the interface on their end. The important point is that though a laboratory can cover the cost of their side (the LIS) of the interface, the conventional wisdom is that the laboratory should not be covering the client’s cost of integrating the EHR portion of the interface.

Several high profile legal cases involving large clinical laboratories have provided more precise guidelines for remuneration exceptions. Clinical laboratories, to gain referrals, can not provide a product of value that does more than simply manage lab orders and report results. In the past, clinical laboratories have provided cloud-based software products to clients that, in addition to delivering lab results, functioned as EHRs for the client. The functions outside of lab related-use are considered remuneration, and laboratories should avoid these arrangements.

In general, it is best to avoid providing clients with products that are unrelated to laboratory operations. For compliance purposes, laboratories should always track the dollar amount spent on client interfaces and consult their legal counsel before providing a service that may be of benefit to the client.