Stark Law Violations

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A person or organization may violate both the “Stark Law” (42 U.S.C. § 1395nn), the Medicare anti-kickback statute (42 U.S.C. § 1320a-7b(b)) and the False Claims Act (31 U.S.C. § 3729, et seq.) by giving or receiving improper incentive payments for Medicare or Medicaid patient referrals. The Stark Law forbids a health care provider from billing Medicare or Medicaid for certain healthcare services referred by physicians who have a financial relationship with the provider ( a practice known as “self-referrals”) --unless that relationship falls within certain safe harbor exceptions. A prohibited financial relationship includes a provider’s agreement to compensate a physician in a manner that takes into account the volume of the physician’s referrals or the revenue realized through those referrals. The Government prohibits improper self-referrals because of the fear that referring physicians and billing providers will advance their own financial interests and not the healthcare interests of Medicare and Medicaid patients.


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Stark Law Violations

A Stark Law violation can also result in a False Claims Act violation. That is because a healthcare provider that accepts a prohibited referral is also prohibited from presenting a claim or bill for its services to the government or any third-party intermediary. If such claims are presented, Stark mandates that no payment may be made. Typically, a whistleblower alleges that the healthcare provided made “false certifications” in their cost reports or claim forms to the effect that the provider had complied with the laws and regulations dealing with the provision of healthcare services, when, in fact, they had not because they had violated the Stark provisions. A whistleblower can bring a case based on the False Claims Act violation and possibly share in any recovery by the Government.

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