Stark Law Timing: 1 Year, 2 Years, 5 Years, and More Timing Limitations

Episode Date: November 8, 2023

In this episode of Stark Integrity, Bob Wade (“Captain Integrity”) breaks down one of the most technical—but critical—areas of Stark Law compliance:

Timing requirements.

From contract terms to repayment obligations, timing rules under Stark are not just administrative—they are core elements of compliance.

The One-Year Rule: A Foundation of Stark Compliance

A key focus of the episode is the one-year term requirement, which appears across multiple Stark Law exceptions, including:

• Personal Services Arrangements
• Space and equipment leases

These exceptions generally require:

• A written agreement
• A term of at least one year
• Compensation set in advance and consistent with FMV

Importantly:

• Even if an agreement is terminated early,
• The parties cannot simply reset or replace it within that first year without creating risk.

As Wade emphasizes, this is a standalone requirement—not just a formality.

Why Timing Matters Operationally

Timing issues often arise not from bad intent, but from operational breakdowns, such as:

• Contracts expiring and continuing without renewal
• Amendments made mid-term without proper structure
• Overlapping or inconsistent agreement periods

Because Stark is a strict liability statute, even small timing errors can trigger violations.

The Bigger Timeline: 60 Days and 6 Years

Beyond contract terms, timing also governs how organizations respond to potential violations.

Two critical rules:

• 60-Day Rule:
  Providers must report and return identified overpayments within 60 days
• 6-Year Lookback Period:
  Organizations generally must evaluate and repay overpayments going back six years

These timelines create significant exposure if issues are not identified and addressed promptly.

Calendar Year vs. Rolling Periods

Another nuance highlighted in the episode is how timing is measured:

• Some requirements are tied to a fixed term (e.g., 1 year)
• Others may involve rolling periods or lookback windows

Understanding the difference is critical when:

• Structuring agreements
• Evaluating compliance over time
• Conducting internal audits

The Risk of Misusing Exceptions

Wade also cautions against mixing or repeatedly relying on different exceptions without careful analysis.

Each exception has:

• Its own timing requirements
• Its own structural rules

Improper use can create:

• Gaps in compliance
• Difficulty defending arrangements during audits

Practical Takeaways

This episode reinforces several key points:

• The one-year term is a core requirement—not optional
• Timing errors are one of the most common sources of Stark violations
• Organizations must track:
  • Contract start and end dates
  • Amendments and renewals
  • Payment periods
• Overpayment rules (60 days / 6 years) create real financial exposure

Final Thoughts

Timing under the Stark Law is not just about deadlines—it is about structure, discipline, and documentation.

As Bob Wade makes clear, many compliance failures are not due to complex valuation issues, but because organizations simply lose track of time.

In Stark compliance, that can be costly.

Click here to listen to this Stark Integrity Podcast Episode:
https://podcasts.apple.com/us/podcast/stark-law-timing-1-year-2-years-5-years-and-more/id1588939373?i=1000634088175&l=fr-FR