Stark Law and the federal Anti-Kickback Statute (AKS) are usually discussed in the context of hospitals and large groups, but the rules apply to solo practices too — sometimes in ways that surprise physicians who never expected to encounter them.
Two different laws, often confused
The physician self-referral law (Stark Law, 42 U.S.C. § 1395nn) is a strict-liability civil statute. It prohibits a physician from referring a Medicare patient for certain "designated health services" (DHS) to any entity with which the physician — or an immediate family member — has a financial relationship, unless a specific exception applies. Intent does not matter: if the arrangement does not fit an exception, it is a violation.
The Anti-Kickback Statute (42 U.S.C. § 1320a-7b) is a criminal law. It prohibits knowingly and willfully offering, paying, soliciting, or receiving anything of value to induce or reward referrals of items or services covered by any federal healthcare program. AKS has "safe harbors" rather than exceptions, and intent does matter — but since 2010, a claim submitted in violation of AKS is automatically a False Claims Act violation as well, which is where the big financial exposure comes from.
Where solo practices actually run into these
A solo physician who sees only their own patients, bills under one NPI, and has no outside financial relationships is generally outside the high-risk zone. Problems tend to appear when the practice starts doing any of the following:
1. In-office ancillary services
If you start offering in-office lab work, imaging, physical therapy, or DME and bill Medicare for any of it, Stark Law is now in play. The in-office ancillary services exception permits this, but only if you meet structural tests: the service must be performed in the same building as your primary practice (or a centralized building under specific rules), billed under the practice's tax ID, and supervised appropriately. Practices that set up a "side lab" in a different building or bill under a separate entity frequently trip the exception without realizing it.
2. Space, equipment, and personnel sharing with another practice
Sharing exam rooms with another physician, renting a room to a visiting specialist, or splitting the cost of a medical assistant looks like straightforward economics. Under Stark and AKS, each of those arrangements needs to meet specific exceptions: written agreement, term of at least one year, rent at fair market value, not based on the volume or value of referrals. "We'll just handshake it" is the most common AKS exposure for small practices.
3. Medical director stipends, speaking fees, and consulting payments
If a hospital, ASC, or pharmaceutical company offers you a medical director role, a speaking honorarium, or a consulting retainer, the payment is an AKS issue the moment you also refer patients to them or use their products. The Personal Services safe harbor protects these arrangements only if the total compensation is set in advance, is fair market value, does not vary based on referrals, and is documented in a written agreement with a term of at least one year.
4. Referral relationships with ancillary providers
The most common mistake: receiving any free or discounted item or service from a provider you refer to — free lunches beyond a de minimis value, a free EHR module, "complimentary" marketing support, or a portable ultrasound on loan. The Non-Monetary Compensation exception allows modest annual amounts (currently around $507 per physician in 2025; CMS updates this annually), but it is narrow and easy to exceed.
5. Ownership in outside entities
An ownership stake in a surgery center, imaging facility, lab, or DME supplier to which you refer is a Stark relationship. Several safe harbors exist (the ASC safe harbor, the rural provider exception, the whole-hospital exception as modified by the ACA), but they are technical and worth a one-time legal review before investing.
What to actually do
Before any outside financial relationship — a lease, a stipend, a referral arrangement, an ownership stake — have a healthcare attorney review it and map it to a specific Stark exception and AKS safe harbor. This is a one-to-three-hour legal review, not a full engagement. The cost of that review is a small fraction of the cost of unwinding a non-compliant arrangement later, which typically involves refunding claims and self-disclosing to OIG.
Build a simple compliance file that contains: every financial arrangement with another provider or entity, signed and dated; the specific exception/safe harbor it relies on; and the fair market value basis for any compensation amount. OIG's Self-Disclosure Protocol is much less painful when you can produce this file.
Train your front desk on gifts and meals. The single most common referral-relationship problem in small practices is pharmaceutical or device representatives providing meals, swag, or services that cumulatively exceed the Non-Monetary Compensation limit. A one-line policy — "log every rep gift, no cash equivalents, no gift cards" — prevents this.
Pure cash-pay and DPC practices have meaningfully less exposure, because Stark applies specifically to Medicare and AKS applies to federal healthcare programs. A practice that sees no Medicare, Medicaid, TRICARE, or ChampVA patients is outside the direct reach of these laws — though state equivalents (mini-Stark and mini-AKS laws exist in many states) may still apply.