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Stark Law and the Anti-Kickback Statute

Heath Hyde Protects Healthcare Professionals from Anti-Kickback Statute and Stark Law Violations

Medical professionals are prohibited from engaging in certain types of financial connections and from paying or accepting kickbacks, compensation, or anything of value in exchange for referring patients who would have their care covered by government healthcare programs like Medicare and Medicaid. Federal prosecutors like to make claims of fraud under these two statutes.

The Anti-Kickback Statute and the Stark Law are both intended to prevent possible financial gain from having an impact on decisions about medical treatment. According to federal prosecutors, kickbacks and other illegal cash transactions encourage physicians to refer patients for services they might not genuinely require. They may result in:

  • Excessive use of medical services; 
  • Rise in the price of programs for Medicare, Medicaid, and other payers;
  • Ineffective medical judgment; and
  • Unjustified competition

Patients have a right to know that the care they receive is based on their genuine medical requirements rather than the financial interests of their doctor, according to the Department of Justice.

Despite the fact that both statutes apply to illegal financial arrangements, there are significant differences between them. 

Regulatory Anti-Kickback Statute

Unlike the Stark Law, the Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b), applies to any medical professionals who are in a position to propose or arrange for the provision of medical services. “Any item or service for which payment may be provided in whole or in part under a Federal health care program” is referred to as a “referral” under the Anti-Kickback Statute. 

The Anti-Kickback Statute prohibits a variety of actions, but it also calls for proof of a “intent to induce referrals.” When something of value is “knowingly and willingly” offered with the intention of encouraging referrals, the Anti-Kickback Statute’s penal prohibitions are broken.

Even if the defendant did not specifically intend to violate the Anti-Kickback Statute, claims for payment made to Medicare or Medicaid that include goods or services obtained in violation of the Anti-Kickback Statute are regarded as false claims under the False Claims Act.

Because they were unaware that the Anti-Kickback Statute existed, providers cannot claim that they were unaware that they were breaking the FCA.

Stark Law

According to the Stark Law, 42 U.S.C. 1395nn, “referrals” are only permitted for a select group of medical services, referred to as “designated health services,” such as lab tests, hospital services, prescription medications, and durable medical equipment. The Stark Law also exclusively covers interactions with medical professionals.

Contrary to the Anti-Kickback Statute, the Stark Law outright forbids a wide range of financial ties and does not demand evidence of an intention to compel referrals. However, determining whether a certain financial arrangement violates the Stark Law can be more challenging from a technical standpoint.

Examples of illegal financial arrangements and kickbacks under the Stark Law and the Anti-Kickback Statute

The Anti-Kickback Statute and the Stark Law differ from one another, and rules offer “safe harbors” that allow specific agreements.

Understanding, analyzing, and developing a False Claims Act case based on violations of the statutes and regulations frequently calls for a significant amount of familiarity with them.

The main analysis typically examines one key issue, though: was there anything of value offered to encourage referrals for medical care?

This “item of value” can be as straightforward as money or as intricate as the right to invest in a successful joint venture or a carefully drafted physician employment agreement. In general, the Anti-Kickback and Stark laws can be used to define anything of value to a person in a position to refer, such as free labor, discounted office space, patient referrals, or a sizable incentive, as an illegal enticement.

Traditional illustrations of anti-kickback and Stark law infractions include:

  • Companies that pay doctors bribes through large salaries or “consulting” fees to act as Medical Directors, proctors, or “consultants,” even when the doctors perform little genuine, beneficial work;
  • Hospitals, nursing homes, labs, dialysis centers, drug or DME businesses that give doctors who can refer patients the chance to invest in surgical centers, distributorships, joint ventures, or other investment opportunities on advantageous financial terms, particularly if those terms are based on the volume of patients the doctor will refer;
  • Hospitals that tie their employed doctors’ income or “performance bonuses” to the quantity of x-rays, lab tests, or other treatments they order there;
  • Physician practices are purchased by hospitals, dialysis centers, or other providers for exorbitant sums in exchange for the doctor remaining on staff and referring patients to the facility;
  • Hospitals that provide physicians with office space at rent below market rates, free access to administrative or clinical support staff, or other special offers on overhead costs;
  • Paying nursing homes for long-term contracts to offer services to nursing home patients; providing nursing homes with free or inexpensive access to consulting pharmacists, therapists, or other clinical or support staff; and providing competent therapy providers with access to nursing homes;
  • Drug firms paying pharmacies (specialty or retail) kickbacks to switch the prescriptions of patients;
  • Drug manufacturers paying insurance companies bribes to be included on their formularies;
  • Payments made to patient recruiters or to patients directly by specialty pharmacists, DME providers, therapy centers, nursing homes, etc.

In our connected pages, you may read about more instances of the government taking enforcement action to halt illegal kickbacks.

Stark Law and the Anti-Kickback Lawyer | Heath Hyde

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Preventing Federal Charges of Illegal Financial Arrangements and Kickbacks against Healthcare Professionals

There are too many instances to count in which the Federal Government alleges that healthcare practitioners have tried to defraud the healthcare system. Sometimes the accusations made by the prosecutor are false. Heath Hyde has frequently been a key player in getting accusations and charges under the Stark statute and the Anti-Kickback Statute withdrawn or reduced to fines.

The government has long seen enforcement of the Anti-Kickback and Stark laws as crucial to preventing healthcare fraud, waste, and abuse. Illegal kickbacks and financial arrangements are planned and executed at many different levels of the healthcare system, from individual medical offices to the executive offices of major pharmaceutical companies.

Please contact us for a confidential consultation if you have any questions or would like to talk confidentially with a member of Heath Hyde’s Healthcare & Anti-Kickback lawyer team.

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to learn more about Anti-Kickback Statute at 903.439.0000 or fill out our online contact form.

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