Stark Law / Anti-Kickback / Fraud and Abuse Lawyers (2023)

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In doing business, healthcare providers must comply with many complicated regulations, such as: These include the federal ban on physician self-referral (commonly known as the Stark Act), the state anti-bribery law, and a variety of state fraud and abuse laws that do not reflect federal regulations. Healthcare companies may be further constrained by company practice drug bans, fee-sharing prohibitions, reporting requirements, eligibility requirements or Medicare certification requirements and billing rules (such as anti-markup). At Wachler & Associates, we've been helping vendors navigate these difficult areas of the law for over 25 years. We have conducted Stark and other regulatory reviews for many types of providers, including group practices, hospitals, hospital-physician organizations, physician organizations, physician-owned dealers, equipment leasing companies, and diagnostic testing facilities, to name a few. Whatever your healthcare endeavor, our attorneys can help you identify potential regulatory pitfalls so you can plan your business in compliance with healthcare fraud and abuse laws, such as the Stark Regulations and the Anti-Bribery Statute being able to lead.

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Summary of Stark's Law

The Physician Self-Referral Prohibition, commonly known as the Stark Act, is a complex body of legislation that has expanded steadily since it was first published in 1995. Back then, Stark only applied to clinical laboratory performance. Stark now applies to a large number of services (referred to as “Designated Health Services” or “DHS”), as well as virtually every financial relationship between a physician and the facility that performs or bills for DHS. In summary, physicians are prohibited from transferring DHS payable by Medicare or Medicaid to an entity with which the physician (or an immediate family member) has a financial relationship, unless an exception is made. Failure to make an exception will result in severe penalties, including refusal to pay, refund of payment, a $15,000 civil fine per service, and a $100,000 civil fine for each settlement found to be fraudulent.

Our experienced healthcare attorneys can help you assess whether Stark's law applies to your relationships and whether an exception is possible. If an exception is available, we can help structure your contracts, procedures, and policies to be Stark compliant. We encourage you to review this review at least annually (if not more often) to ensure that your relationships, the DHS you operate, and the law have not changed in a way that prevents you from complying.

Anti-Corruption Law and Related Laws

Most situations that may involve Stark laws must also be discussed in accordance with the Anti-Corruption Act and other public health regulations. The Anti-Bribery Act provides criminal sanctions for any person or entity that knowingly and knowingly offers, pays, requests, or receives compensation in order to effect business payable by Medicare or Medicaid. Violating the anti-corruption law can result in a fine of up to $25,000, imprisonment for up to five years, or both. Violation can also result in disqualification from the Medicare program.

There are many other laws, both federal and state, that create potential liability for healthcare providers and other healthcare companies, including state anti-corruption laws, state bans on self-referencing (similar to Stark's federal regulations, but often applicable to all forms of payers) . 🇧🇷 Businesses and healthcare providers should also be aware of corporate drug ban practices in place in many states and the specific Medicare rules that apply to different types of providers. Some examples of Medicare rules that can cause problems for healthcare companies include the anti-markup rule, multi-facility eligibility requirements, and performance, licensing, or certification standards.

Whether you are dealing with these questions during your business planning or have a specific concern, our experienced attorneys can help you understand and comply with these many complicated health regulations.

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Frequently Asked Questions

Click here for a list of FAQs about Stark and other fraud and abuse issueshere.

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External Sources

For more information, see the CMS overviewhere.

For information on the Anti-Corruption Act and the opinions of the HHS OIG, go to:http://oig.hhs.gov/compliance/advisory-opinions/index.asp

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Contact

If you have any questions about Stark, the Anti-Kickback Statute, the Anti-Markup Rule, or related topics, please contact usandres wachler248-544-0888 or through ourWebsite-Web.

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ArticleOur attorneys have written extensively on Stark and related matters. For a full list of our subscription items, clickhere.

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RodeAttorneys for Wachler & Associates have spoken frequently on Stark and related matters. Click here for a complete list of Wachler & Associates conferenceshere.

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Manifest/Fraud and Abuse Related FAQsWhat exactly does Stark forbid?

In summary, physicians are prohibited from diverting DHS payable by Medicare or Medicaid to an entity with which the physician has a financial relationship, unless an exception is made.

What are the penalties for injuring Stark?

Penalties for injuring Stark can be severe. These include refusing to pay, refunding payment, imposing a $15,000 fine per service, and imposing a $100,000 fine for any settlement found to be an evasion scheme.

Who does Stark qualify as a "medical" matter?

The final regulations of Phase I define “physician” as a medical doctor or osteopath, a doctor in dental surgery or dentistry, a doctor in podiatry, a doctor in optometry or a chiropractor.

Who is considered an "immediate family member" under Stark?

The term "immediate family member" is broadly defined to refer to a husband or wife; biological or adoptive parent, child or sibling; stepfather, stepson, half-brother or half-sister; father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law; grandfather or grandson; and spouse of a grandparent or grandchild.

What is DHS?

The term DHS refers to Designated Health Services. These are certain services (including certain types of equipment, consumables and medicines) to which the prohibition on medical self-referral applies. The following items or services are DHS:

1. clinical laboratory services.
2. physiotherapy services.
3. occupational therapy services.
4. Outpatient speech therapy.
5. Radiology and some other imaging services.
6. Radiation therapy services and supplies.
7. Durable medical devices and consumables.
8. Parenteral and enteral nutrients, devices and accessories.
9. Prostheses, orthoses and prosthetic devices and accessories.
10. Family Medical Services.
11. Outpatient Medication.
12. hospital and outpatient care.

CMS publishes a list of CPT codes that qualify as DHS to help vendors comply with Stark. This list is availablehere.

What constitutes a "reference" for purposes of Stark banishment?

Stark defines "referral" broadly as including a doctor's request for an item or service paid for by Medicare or Medicaid (including a doctor's request to see another doctor and any tests or procedures performed by that doctor ordered or performed by another physician) or a request from a physician to create a treatment plan that includes the provision of a DHS. The definition of "referral" does not include services performed by a referring/referring physician personally (but excludes services performed by staff or other members of the same practice group as the referring physician). This allows physicians who personally fulfill DHS prescriptions for their patients to structure agreements without worrying about possible violations by Stark.

What constitutes a "financial relationship" for Stark's purposes?

A “financial relationship” is defined as direct or indirect ownership or interest in a company through equity, debt or other means, or a direct or indirect compensation arrangement with a company.

What exceptions are there?

There are numerous exceptions to Stark including the Office Ancillary Services Exception, the Hospital-Wide Exception (which was significantly affected by the Affordable Care Act), the Bona Fide Employment Exception and more. Each exception has a set of elements that must be exactly true for the exception to be true. Failure to meet any of these elements constitutes a violation of Stark Law. This means that if the provider is accepting referrals from a physician with whom they have a financial relationship, it is extremely important for providers to seek help in reviewing and understanding all aspects of the exception.

Does Stark require that patients be notified when a physician has a financial relationship with a provider?

If a physician prescribes certain diagnostic tests (MRI, CT, and PET) under the Office Benefits Exception, the physician must notify the patient in writing at the time of referral. This notice must clearly state that the patient is under no obligation to receive these services at the facility that has a financial relationship with the physician. The notice must also list at least five facilities within a 25-mile radius of the office. If there are fewer than five vendors within the 25 mile radius, you must list all vendors within the radius and provide the vendor's name, address, and phone number. The list cannot include hospitals as one of the five facilities, but it can list hospitals in addition to the five facilities.

Is there a process to clarify if a fix falls outside of the Stark ban or encounters an exception to the ban?

CMS has established a consultative process whereby parties to an agreement may obtain a written determination from CMS as to whether the agreement constitutes a “financial relationship” under Stark II and whether the agreement satisfies an exception.

If I violated Stark, what are my options?

The Affordable Care Act amended federal law to require anyone who has received an overpayment to report and repay the overpayment and to notify the facility to which the overpayment was repaid in writing of the reason for the overpayment. The overpayment must be reported and refunded within 60 days of the determination of the overpayment or the due date of the applicable expense report, if applicable.

A company that withholds an overpayment after this window may be liable under the False Claims Act (31 U.S.C. §3729). This can result in large fines, treble damages, and disqualification from federal and state health programs.

Instead of refunding the full overpayment, the Centers for Medicare and Medicaid Services ("CMS") also issued a Medicare Self-Referral Disclosure Protocol, as required by the Affordable Care Act. Under this protocol, vendors can disclose Stark violations and CMS can reduce the amount owed for the violation.

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