The Stark Law restricts physician referrals for designated health services (DHS) when a financial relationship exists, and also prohibits billing for services furnished through a prohibited referral — no intent required.
The Anti-Kickback Statute (AKS) makes it a crime to knowingly and willfully offer, pay, solicit, or receive remuneration to induce or reward referrals, purchases, or recommendations involving federal healthcare programs.
Same industry, different rules — a single physician compensation agreement can comply with one law and violate the other. Let’s explore:
- When FMV compensation can still create liability
- 12 healthcare scenarios analyzed under both Stark and AKS
- Why Stark exceptions and AKS safe harbors are not interchangeable
- Current criminal maximums (corrected from the outdated figures still circulating)
- Side-by-side comparison table updated with 2026 penalty figures
- A dual-law screening checklist for physician arrangements
What are the differences between Stark Law and AKS at a glance?
The fastest way to separate the two laws is through seven dimensions. Every row below represents a meaningful operational difference — not just a wording change.
| Dimension | Stark Law | Anti-Kickback Statute |
| Statute | 42 U.S.C. § 1395nn | 42 U.S.C. § 1320a-7b(b) |
| What it prohibits | Physician DHS referrals involving financial relationships without an exception | Knowing and willful remuneration to induce or reward federal program business |
| Who is covered | Physicians and their immediate family members | Anyone on either side of an improper payment |
| Intent | No intent required (strict liability) | Knowing and willful conduct required |
| Services covered | 12 designated health service categories | Any item or service under federal healthcare programs |
| Protections | Regulatory exceptions — must be satisfied | Statutory exceptions + voluntary regulatory safe harbors |
| Legal character | Civil | Criminal (with additional civil and administrative exposure) |
| Primary regulators | CMS (with DOJ enforcement) | HHS-OIG and DOJ |
This table answers the primary search question. But the comparison gets more complicated — and more consequential — when you apply both laws to the same financial arrangement.
SCOPE COMPARISON
Who and what each law covers
STARK LAW — Narrow and strict
✦ Physicians + immediate family only
✦ 12 DHS categories only
✦ Medicare framework + Medicaid extension
✦ No intent needed — violation on the facts alone
AKS — Broad and intent-based
✦ Anyone — physicians, hospitals, labs, marketers, patients
✦ Any federally reimbursable item or service
✦ All federal healthcare programs
✦ Must prove knowing and willful conduct
How do scope and coverage differ?
The two laws regulate overlapping territory but draw different boundaries.
People covered
Stark generally applies when a physician, as defined by Medicare’s statutory definition (which includes doctors of medicine or osteopathy, dentists, podiatrists, optometrists, and chiropractors, subject to applicable limits), refers a patient for DHS to an entity with which the physician or an immediate family member has a financial relationship.
Referrals made independently by nonphysician practitioners generally fall outside Stark, although indirect relationships and physician-directed referrals may require further analysis.
AKS is far broader. It covers any person or entity that offers, pays, solicits, or receives improper remuneration connected to federal healthcare program business. Laboratory marketers, pharmaceutical sales representatives, hospital administrators, DME suppliers, and patient recruiters all fall within its reach.
Services covered
Stark covers 12 DHS categories — clinical labs, imaging, physical therapy, home health, DME, and others. CMS maintains a current code list that ties specific CPT/HCPCS codes to DHS categories.
AKS covers any item or service reimbursable by a federal healthcare program. There is no DHS filter. A referral for a non-DHS service that does not trigger Stark may still create AKS exposure if improper remuneration is involved.
Programs covered
Stark’s statutory framework centers on Medicare, with a Medicaid extension under Social Security Act § 1903(s). AKS covers Medicare, Medicaid, TRICARE, and other federal healthcare programs more broadly.
Why does intent matter so much?
Intent is the single most consequential operational difference between the two laws.
Strict liability under Stark
Stark operates without an intent requirement for the core referral prohibition.
If a physician has a financial relationship with a DHS entity, refers a Medicare patient there, and no exception fully applies, the referral violates Stark — regardless of whether anyone intended to break the law.
An expired contract, a compensation formula that inadvertently ties to referral volume, or a documentation gap can trigger liability without any deliberate wrongdoing.
The December 2025 NewYork-Presbyterian settlement ($6.84 million) involved allegations that agreements with an oncology practice expired in 2016 while payments continued through 2019.
The hospital acknowledged substantial failures in contract performance. That’s the thing about strict liability — the law does not ask whether you meant to violate it. It asks whether you did.
Knowing and willful under AKS
AKS requires that the defendant acted knowingly and willfully. But § 1320a-7b(h) clarifies that defendants do not need actual knowledge of the AKS statute or specific intent to violate it.
If someone knowingly pays for referrals with the intent to induce federal program business, that satisfies the standard.
In practice, Stark can catch accidental violations. AKS targets deliberate conduct — though intent may be established from the arrangement’s structure and surrounding evidence, not just an outright admission.
The same transaction can implicate both laws, neither, or just one, depending on the facts and the financial relationships involved.
Are Stark exceptions and AKS safe harbors the same thing?
No. This is one of the most practically dangerous misconceptions in healthcare compliance.
How Stark exceptions work
Stark exceptions exist in the statute and regulations (42 CFR §§ 411.355–411.357). When a physician financial relationship involves DHS referrals, an applicable exception must be satisfied for the entity to bill Medicare. Exceptions are not optional protections — they are required pathways.
How AKS safe harbors work
AKS safe harbors are regulatory provisions under 42 CFR § 1001.952 that protect qualifying arrangements from AKS prosecution.
But safe harbors are voluntary. Meeting one provides protection. Failing to meet one does not automatically make the arrangement illegal — it means the arrangement must be evaluated on its facts, including intent.
HHS-OIG’s FAQ guidance confirms both points explicitly.
Why satisfying one does not cover the other
A medical director arrangement might satisfy Stark’s personal services exception (if all conditions are met) but still violate AKS if the payments were designed to reward referrals.
Conversely, an arrangement could fit within an AKS safe harbor for employment but fail a Stark exception if the compensation formula reflects the volume or value of DHS referrals.
The February 2026 OASIS Hospital settlement ($5.6 million) involved allegations under both Stark and AKS — physician financial contributions structured as bond interest payments.
| Feature | Stark exceptions | AKS safe harbors |
| Legal effect | Required when the prohibition applies | Voluntary protection |
| If not satisfied | Arrangement violates Stark | Arrangement requires fact-specific analysis |
| Intent relevance | N/A (strict liability) | Critical — conduct and purpose matter |
| Cross-law protection | Does not resolve AKS exposure | Does not resolve Stark exposure |
12 examples: Stark, AKS, both, or neither?
Each scenario below examines the same arrangement under both laws. The goal is to show how different facts change which law applies — and why single-law analysis is never enough.
Physician ownership
When a physician has a financial stake in an entity and refers patients there, both laws may apply simultaneously — but for different reasons and through different legal tests. The scenarios below show how the same ownership arrangement gets analyzed twice.
Scenario 1: Physician owns equity in an imaging center
A cardiologist holds 25% equity in a freestanding MRI facility and refers Medicare patients there for cardiac imaging.
Stark analysis:
The physician has an ownership interest in an entity furnishing imaging services (DHS). Without a qualifying ownership exception under § 411.356, the imaging center cannot bill Medicare for these referrals.
AKS analysis:
If distributions or other financial returns correlate with the physician’s referral volume, the arrangement may also raise AKS concerns about remuneration intended to induce federal program business.
Scenario 2: Physician invests in a joint venture surgery center
Four surgeons and a hospital form a joint venture ambulatory surgery center (ASC). Each surgeon receives distributions based on the center’s overall revenue.
Stark analysis:
Stark generally does not apply to covered ASC facility services paid under the Medicare ASC composite payment, because those services are excluded from DHS.
However, separately payable DHS and any financial relationships involving other DHS entities require separate assessment. The ASC structure does not provide blanket Stark immunity.
AKS analysis:
The ASC investment safe harbor at 42 CFR § 1001.952(r) specifically addresses qualifying physician investors who perform procedures at the facility.
Ordinary ownership-based distributions are not automatically improper, but distributions structured to correlate with individual referral volume create substantial risk.
Compensation arrangements
Compensation is where the two laws most frequently collide.
A payment that satisfies every condition of a Stark exception can still violate AKS if its real purpose is to reward referrals. The reverse is also possible — though less common in practice.
Scenario 3: Hospital pays a medical director
A hospital pays a referring cardiologist $10,000 per month for medical director duties. The physician also refers patients to the hospital for DHS.
Stark analysis:
The personal services exception requires identifiable services, a written agreement, FMV compensation, and commercially reasonable terms. If the physician provides minimal work, the exception may fail.
AKS analysis:
Even if the Stark exception is satisfied, overpaying for minimal services may suggest inducement. OIG’s April 2026 guidance confirmed that fair market value alone does not resolve AKS risk.
The January 2026 Traditions Health settlement ($34 million) involved allegations of medical director payments to referring physicians under both laws.
Scenario 4: Productivity bonus tied to personal services
A group practice pays its orthopedic surgeon a productivity bonus calculated from the surgeon’s personally performed wRVUs only.
Stark analysis:
Compensation for personally performed services fits within the employment exception’s compensation conditions more naturally than referral-based bonuses.
AKS analysis:
The employment safe harbor generally protects bona fide employee compensation for legitimate services. This arrangement faces lower AKS risk than referral-linked bonuses.
Scenario 5: Referral-linked bonus formula
A hospital pays an employed physician a quarterly bonus calculated as 10% of the total imaging revenue generated by all patients the physician refers — not just personally performed services.
Stark analysis:
This formula ties compensation to the volume or value of the physician’s DHS referrals. The employment exception requires that compensation not reflect referral volume/value in a way that violates the regulatory conditions.
AKS analysis:
A bonus explicitly linked to referral revenue raises strong inducement concerns.
A 2024 study using complete Medicare fee-for-service claims found an approximately 10% shift in referrals toward higher-priced facilities following physician-hospital integration for two specific surgical procedures examined.
Financial alignment measurably changes where physicians send patients — though the study establishes an economic effect, not a legal violation in any particular arrangement.
Marketing and intermediary arrangements
AKS tends to dominate this territory.
Marketing arrangements often involve nonphysicians and services outside DHS categories — which means Stark may not apply at all, while AKS creates the primary risk.
Scenario 6: Laboratory pays marketers per referral
A toxicology lab hires an independent contractor marketer and pays $150 per Medicare specimen referred.
Stark analysis:
Stark generally does not apply solely because a laboratory pays an independent marketer per specimen.
It may apply if a referring physician or immediate family member has a direct or indirect financial relationship with the laboratory and the physician refers
Medicare patients for clinical laboratory DHS without an applicable exception.
AKS analysis:
Per-referral compensation to an independent contractor for federal program business creates significant AKS exposure. The employment safe harbor does not cover independent contractors.
The DOJ’s June 2026 MSO laboratory settlements — part of over $61 million in recoveries since 2019 — involved disguised referral payments to both marketers and physicians.
Scenario 7: Pharmaceutical company speaker programs
A drug manufacturer pays physicians $2,000 per dinner presentation about its product. Attendees include the physician’s family and friends.
Stark analysis:
Pharmaceutical speaker fees do not automatically trigger Stark. Although outpatient prescription drugs are DHS, Stark requires a qualifying financial relationship with the entity furnishing the DHS.
The drug manufacturer paying the speaker is not necessarily the pharmacy furnishing and billing for the prescription. The payment, dispensing, referral, and billing relationships must be examined before concluding Stark applies.
AKS analysis:
Speaker payments structured to reward prescribing — rather than compensate genuine educational services — create direct AKS exposure. The Veloxis (46+million)andPfizer/Biohaven(59.75 million) settlements both alleged this pattern.
Lease and space arrangements
Real estate transactions between physicians and hospitals create Stark and AKS exposure that many organizations underestimate — because a lease looks like a lease, not a referral arrangement. Until someone compares the rent to market rates.
Scenario 8: Below-market office rent from a hospital
A hospital rents office space from a referring specialist at $38 per square foot while paying market rate of 28–32 for comparable space elsewhere. (Hypothetical figures for illustration.)
Stark analysis:
The hospital’s above-market payments flow to the referring physician. The office space rental exception under § 411.357(a) requires FMV rent. Paying above market may fail this condition — though failure of one specific exception does not automatically establish that every possible exception fails.
AKS analysis:
Above-market rent paid to a referring physician may constitute remuneration intended to induce referrals. The rental safe harbor also requires FMV, among other conditions.
The April 2026 Trinity Hospital settlement ($1.7 million) involved allegations of rental arrangements with two referring physicians that allegedly exceeded fair market value between 2014 and 2020.
Patient-facing arrangements
AKS does not only regulate payments between healthcare businesses.
Financial inducements directed at patients fall squarely within its scope — and create separate exposure under the Beneficiary Inducements CMP law.
Scenario 9: Routine copayment waivers
A practice routinely waives the 20% Medicare coinsurance for all patients without assessing financial hardship.
Stark analysis:
Stark generally is not implicated solely by a practice’s waiver of patient coinsurance.
The nonmonetary compensation exception under § 411.357(k) concerns certain compensation to physicians from DHS entities, not waivers of patient cost-sharing.
The principal federal concerns here sit with AKS and the Beneficiary Inducements CMP law.
AKS analysis:
Routine copayment waivers without individualized financial hardship assessments can constitute beneficiary inducements that violate AKS.
OIG has issued fraud alerts specifically addressing this practice. (Permissible financial hardship waivers and certain other protected arrangements may receive different treatment.)
Arrangements that may fall outside both laws
Not every payment in healthcare triggers a compliance crisis. The screening framework matters as much for identifying what is not a problem as for identifying what is.
Scenario 10: Physician buys ordinary office supplies
A physician purchases standard office supplies (paper, printer cartridges) from a vendor. No referral relationship exists.
- Stark analysis: No physician referral for DHS. Stark does not apply.
- AKS analysis: No remuneration connected to federal program referrals. AKS does not apply.
Not every financial relationship in healthcare creates legal exposure. The screening framework matters precisely because it prevents overreaction alongside underreaction.
Scenario 11: Qualifying physician employment
A hospital employs a physician under a properly documented agreement. Compensation is FMV, commercially reasonable, and based on personally performed services. The physician refers patients to the hospital for DHS.
- Stark analysis: The bona fide employment exception may cover this arrangement if all conditions are met.
- AKS analysis: The statutory employment exception may apply.
Both laws provide protection for genuine, properly structured employment — but both require actual compliance with their respective conditions.
Modern regulatory arrangements
Value-based care represents the newest frontier of Stark and AKS analysis.
Both laws now have specific protections for qualifying arrangements — but the protections were designed independently, have different conditions, and do not automatically align.
Scenario 12: Value-based care coordination
A hospital and physician group share savings from reducing unnecessary readmissions under a qualifying value-based arrangement.
Stark analysis:
CMS introduced permanent value-based exceptions in its 2020 modernization rule. The arrangement must meet the specific conditions of the applicable exception category.
AKS analysis:
OIG established separate value-based safe harbors under 42 CFR § 1001.952. The qualification criteria differ from Stark’s exceptions.
Value-based arrangements highlight why dual-law analysis is non-negotiable.
An arrangement that qualifies under Stark’s value-based exception may not satisfy the AKS value-based safe harbor if the risk-sharing structure, participant eligibility, or documentation differs.
How do the penalties compare?
The penalty structures reflect each law’s nature — Stark is civil; AKS is criminal with additional civil layers.
PENALTY COMPARISON
Stark Law vs. AKS consequences (2026)
Claim consequences
Denial + refund
FCA treble damages
Program exclusion
Yes
Yes (mandatory in some cases)
False Claims Act exposure
Yes, when FCA elements are met
Yes, under § 1320a-7b(g)
Criminal AKS maximums updated from $25K/5 yrs to $100K/10 yrs by Congress in 2018. CMP amounts reflect 2026 HHS inflation adjustments. Stark also imposes up to $211,146 per circumvention scheme (separate penalty category). FCA liability requires its own statutory elements.
