What Is the Stark Law Period of Disallowance?

If you are looking at a Stark Law self-disclosure, one phrase comes up quickly: the “period of disallowance.” In simple terms, the Stark Law period of disallowance is the stretch of time when a compensation arrangement does not satisfy Stark Law requirements.

Why is that important? Because the Stark Law generally bars a provider, such as a hospital, from billing for certain designated health services when it has a disqualifying financial relationship with a physician. So when people ask, “What is the Stark Law period of disallowance?” they are really asking when billing problems begin and when they may end.

What Happens During the Period of Disallowance?

• Claims for designated health services connected to the noncompliant arrangement generally should not be billed during the period of disallowance.
• If payment is received during that period, the amount may need to be repaid as an overpayment.

That is why the issue matters so much in a Stark Law self-disclosure. By making a self-disclosure, the provider is essentially acknowledging that a Stark Law problem may have occurred. Payments received during the period of disallowance are often treated as overpayments that must be returned to the government. As [CMS]() explains in its [Self-Referral Disclosure Protocol](), no payment may be made for designated health services provided in violation of the physician self-referral law.

When Does the Stark Law Period of Disallowance End?

That is where things get more complicated. CMS regulations provide an outside limit for when the period of disallowance will be considered over. The exact rule depends on the type of arrangement involved, including whether excess compensation is part of the problem. In an excess-compensation case, for example, the period can clearly end once the arrangement is brought back into compliance and the excess amount is repaid.

At the same time, CMS recognizes that Stark Law compliance issues are highly fact-specific. In some situations, repayment may not be realistic, or full compliance may be difficult to restore completely.

For that reason, the rules create an outer point when the parties can be confident the period of disallowance has ended. Even so, these matters are still analyzed case by case, and providers may argue that the period ended earlier based on the specific facts. That can be especially important when a provider has no practical or legal way to force a physician to repay excess compensation.

Why the Period of Disallowance Matters

The bottom line: if a provider is thinking about a Stark Law self-disclosure, it needs to understand the period of disallowance early. That issue can shape whether claims were billable, whether overpayments must be returned, and how the disclosure should be framed.

For providers, compliance teams, and health care counsel, understanding the Stark Law period of disallowance is a key part of evaluating self-disclosure strategy and repayment risk.

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