In general, the federal law (commonly known as the “Stark Law”) prohibits a physician from making a referral to an entity for the provision of designated health services (DHS) payable by Medicare if the physician has a financial relationship with the entity, unless an exception applies, and prohibits the entity from billing for such prohibited services. (42 U.S.C. §1395nn.) Significant penalties are provided for violations and for avoidance schemes. If the ban applies, the physician may not make a referral to the entity for DHS which may be paid for by Medicare and the entity may not, directly or indirectly, bill for any DHS resulting from a prohibited referral to any individual, third party payor, or other entity. A detailed discussion of the “Stark Law” is contained in CMA ON-CALL document #1158, “Self-Referral Prohibitions: Federal Overview.” (California law also contains a self-referral prohibition which recognizes several exceptions that are roughly consistent with federal law. Significantly, however, the state law applies broadly to referrals of all patients, regardless of payor source. The California law is discussed in CMA ON-CALL document #1156, “Self-Referral Prohibitions: California Overview.”)