Stark Law Violations

1. What might constitute an unlawful self-referral?

The starting point is where a physician refers a Medicare or Medicaid patient to a medical facility in which the referring physician has a financial interest, be it ownership, investment, or a structured compensation arrangement. One then needs to whether that referral comes within any safe harbor provision.

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2. What types of facilities or services are subject to the Stark Law?

Prior to 1994, the focus was on clinical laboratory services, but the Omnibus Budget Reconciliation Act of 1993 (so-called Stark II) expanded the prohibition on physician self-referrals from clinical laboratory services to reach a wider array of eleven "designated health services," which includes, clinical laboratory services, radiology services, radiation therapy, durable medical equipment and supplies, home health services, and various in-patient and out-patient services.

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3. Does Stark Law only cover outright cash payments to referring physicians?

No. In fact, many cases involve uncovering disguised kickback arrangements. These include bogus service contracts, leases and other indirect arrangements for giving something of value to the physician in exchange for Medicare and Medicaid patient referrals.

4. What are the penalties for violating the Stark Law and the False Claims Act?

Both the Stark Law and the False Claims Act provide substantial financial fines and penalties for their violations. A whistleblower may be entitled to share in any recovery under the False Claims Act. This could add up to three times the amount of the improper payments to the healthcare provider that billed the Government, plus a per claim fine of up to $11,500.

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