What Is the Main Intent of the Stark Laws?

stark laws

The Stark Law is easily explained.

Essentially, it is similar to the Anti-Kickback Statutes that protect patients from fraudulent referrals for treatment that is not medically necessary. It also protects federal insurance systems like Medicare from paying out on fraudulent claims and wasting money and resources in the process.

Physicians who make a direct referral to another doctor or provider who is a family member or with whom the physician has a financial relationship will be subject to penalties as a result of the Stark Law.

Stark Law Summary

The Physician Self-Referral Law, also known as the Stark Law, is very similar to the Anti-Kickback Statute, which prohibits any healthcare provider from getting a payment or anything of value in exchange for a referral.

The Stark Law, however, is specific to physicians and stops them from referring patients to other healthcare providers with whom they have a relationship and/or stand to gain financially due to an investment or financial partnership.

For example, if a family doctor is married to a physical therapist, they are not legally able to refer any patients to their spouse’s practice because the doctor would stand to gain financially when the patient’s insurance company made payouts to their spouse.

Similarly, if a doctor is invested in a home care business, that doctor cannot refer a patient to that home care business because he will gain financially.

The implication is that the doctor’s judgment may be clouded due to their financial gain and may either refer a patient without medical necessity or may not send the patient to the best possible provider due to bias.

Differences Between Stark and Anti-Kickback Statute

First, the Stark Law is directed at physicians giving referrals to people or organizations with whom they have a financial interest, while the Anti-Kickback Statute prohibits any healthcare provider or organization from taking a payment or anything of value in exchange for a referral.

Second, there are penalties for violating the Stark Law, but it is not a criminal act to do so. Those who violate the Anti-Kickback Statute, however, will face criminal charges.

Litigation Based on Stark Law Violations

When healthcare providers are sued based on perceived violations of the Stark Law, they are often caught off guard. Many don’t even realize that they are out of compliance with a federal regulation or that they are at risk.

The best way to respond to Stark Law-related litigation is to call the Florida Healthcare Law Firm right away.

The sooner we get involved, the quicker we can advise you on the best path forward. Additionally, we can make sure that your response is succinct and effective, and that you hit all deadlines and court dates, avoiding additional fees and penalties.

Each situation is unique, and at Florida Healthcare Law Firm, we specialize in healthcare legal issues. Not only can we assist with the current legal matter at hand, but we can also help you to develop practices that will protect you from this and other federal compliance regulation violations in the future.

Stark Laws Exceptions

healthcare fraud

There are a number of laws in place specifically to prevent physicians from abusing the referral system for profit at the expense of their patients. From the Anti-Kickback Statute to the False Claims Act to the Physical Self-Referral Law, also known as the Stark Law, these laws trigger fines and penalties if they are violated.

Getting to know the laws, as well as their exceptions, will help all physicians to make sure they are doing the right thing, providing the best possible care to their patients, and protecting themselves at the same time.

What Is the Stark Law?

The Physician Self-Referral Law, also called the Stark Law, prohibits physicians from referring Medicaid or Medicare patients for “designated health services” at any entity in which the physician or a family member has a financial interest. “Financial interest” could include ownership or investment interest or any kind of kickback arrangement in which the physician or a family member is paid directly for the referral.

Designated healthcare services include but are not limited to services such as those provided by home healthcare organizations, inpatient and outpatient hospital services, physical therapy, imaging, prosthetic devices, and more.

What Are the Stark Law Exceptions?

There are more than 20 exceptions to the Stark Law that can protect physicians from prosecution if all the criteria are met.

Some exceptions to the Stark Law include but are not limited to the following:

  • Rental of office space
  • Rental of certain equipment
  • Bona fide employment relationships
  • Physician recruitment
  • Some arrangements with hospitals
  • Bona fide charitable donations made by a physician
  • Some nonmonetary compensation

It is important to note that each of these and all other Stark exceptions come with a long list of caveats. There are very strict rules regarding amounts of compensation, geographic location, recruitment specifics, fair market value, and more that can impact whether or not a physician would be considered covered by the exception or not.

It is important to consult with a medical law firm like Florida Healthcare Law Firm that understands the details of the Stark Law and its exceptions. They can review your current arrangements with various entities to determine if the specifics of your situation are protected or potentially putting you at risk for litigation.

Florida Healthcare Law Firm Is Here to Help

The Stark Law is incredibly strict in that it is not required for there to be proof of intent to violate the law in order for the physician to be penalized. This means that if a violation can be proven, even if it was inadvertent, ignorance is not a legal protection.

If you have been charged with violating the Stark Law and feel that an exception applies or would like to know what your options are, contact Florida Healthcare Law Firm for information and support now.

Permissible Payments For Referrals Under The Federal Anti Kickback Statute

anti kickback

anti kickbackBy: Karen Davila

The term “payment for referral” strikes fear in the hearts of health care providers throughout the country because of the significant prohibitions under the federal Anti-Kickback Statute (AKS).  And, Florida’s Patient Brokering Act (PBA) casts an even bigger shadow over arrangements involving payment in exchange for referrals.  There are other statutory restrictions as well, which may apply depending upon the services for which a referral is being made.  Those include but are not limited to statutes prohibiting physician fee-splitting and the federal Eliminating Kickbacks in Recovery Act (EKRA) (applicable to referrals to recovery homes, clinical treatment facilities, or laboratories in an effort to stave off growing opioid-related fraud), and the potential collateral damage of a false claim under the federal False Claims Act (FCA) if any of the above statutes are violated.

So, is there any scenario where a payment may be made by a health care provider in exchange for referrals?  The answer is yes- there is a safe harbor under the AKS (42 U.S. C. §1320a-7b(b)) specifically for such arrangements.  This safe harbor is not commonly used and likely means revision to existing arrangements to come into compliance with its specific requirements.  But it may be worth considering if the referral (and payment for that referral) is not otherwise prohibited as noted above.Continue reading

Preparing to Sell Your Laboratory

prepare a lab for sale

prepare a lab for saleBy: Dean Viskovich

COVID is front and center in all aspects of everyday life and has shined light in the strangest of places that were usually in the dark. In healthcare the laboratory space has always taken a backseat to other sectors in terms of recognition and value. The current climate in the lab space has shifted and it is not an illusion, labs are front and center.

COVID has taken its toll on areas of the economy and investors are certainly one of the first to become aware of this situation. Clinical laboratories are currently an attractive acquisition target and the reasons are numerous, sectors like retail, entertainment and travel are performing poorly and investors are shifting their investment dollars into healthcare and technology.  Investors are looking for growth and profitability and are finding it in healthcare.  Mergers and Acquisitions (M&A) is nothing new in the lab industry, but now careful consideration is required when it comes to deciding the appropriate time to sell your lab.

Continue reading

When Does a Gift Become a Kickback?

gift or kickback

There’s a fine line between gifts and kickbacks within the healthcare setting. Read about the differences and how to properly plan your healthcare marketing in your business.

Continue reading

The Debate Over Physician Owned Hospitals

florida healthcare law firm physician owned hospitals

florida healthcare law firm physician owned hospitalsBy: Dave Davidson

The debate over the pro’s and con’s of physician-owned hospitals has been raging for decades. Physician-owners say their hospitals are more patient-focused, provide higher quality care, obtain better outcomes and therefore receive higher patient satisfaction scores. They also point out their convenience and efficiency.

Opponents argue that physician-ownership leads to overutilization and cherry-picking of only the best patients. The less-desirable patients (both clinically and financially) are then left to be taken care of by the community hospitals. For those reasons, both the American Hospital Association and the Federation of American Hospitals remain strongly opposed to physician-owned hospitals.

Federally, the Stark Law includes an exception which allows a physician to refer patients to a hospital in which the physician has an ownership interest, so long as the ownership interest is in the entire hospital, and not just a subdivision of the hospital. However, in 2010, the federal government weighed in again on the issue, and passed the Affordable Care Act (ACA), which includes provisions which (i) restrict physician referrals to hospitals in which they hold an ownership interest; (ii) restrict any increases in physician-ownership of a hospital; and (iii) restrict expansion of physician-owned hospital facilities. CMS has granted exceptions to these restrictions, but those have been limited to rural hospitals and high Medicaid hospitals, and attempts to amend the law have failed.Continue reading

Federal Agencies Scrutinizing Home Healthcare Fraud & Kickbacks

home healthcare, HHS, heathcare

home healthcare, HHS, heathcare
checking mans blood pressure

By Karina P. Gonzalez

Federal agencies are continuing to target home healthcare industry fraud in “hot zone areas.”

Recently, the U.S. Department of Health and Human Services Office of Inspector General (HHS) released its report. It identified Florida, Texas and select areas in Southern California and the Midwest as areas where home healthcare fraud is more likely to occur. It is obvious that the watch dog agencies will continue to monitor home healthcare spending in these hot zones.

HHS found that a home health agency incorrectly billed Medicare and did not comply with Medicare Billing requirements for beneficiaries that were not homebound and for others that did not require skilled services at all.

In August and September 2018, physicians and the owner of a home health agency were each sentenced on multiple counts of conspiracy and healthcare fraud and ordered to pay $6.5 million in restitution. One physician was sentenced to 132 months in prison following trial. A physician who pled guilty was sentenced to 27 months in prison following a guilty plea. The home health agency owner was sentenced to 42 months in prison.   The defendants paid and received kickbacks in exchange for patients and billed Medicare more than $8.9 million for services that were medically unnecessary, never provided, and/or not otherwise reimbursable. Additionally, certain defendants provided prescriptions for opioid medications to induce patient participation in the scheme.

In September 2018, the co-owner and administrator of a home health agency was sentenced to 24 months in prison, ordered to pay over $2.2 million in restitution, and ordered to forfeit over $1.1 million. The co-owners participated in a home healthcare fraud conspiracy that resulted in Medicare paying at least $2.2 million on false and fraudulent claims. The owners and their co-conspirators paid kickbacks to doctors and patient recruiters in exchange for patient referrals, billed Medicare for services that were medically unnecessary, and caused patient files to be falsified to justify the fraudulent billing.

Back in February 2018, the owner of more than twenty home health agencies was sentenced to 240 months in prison and ordered to pay $66.4 million in restitution, jointly and severally with his co-defendants, after pleading guilty to one count of conspiracy to commit health care fraud and wire fraud. A patient recruiter for the home health agencies, who also owned a medical clinic and two home health agencies of her own, was sentenced to 180 months in prison. Another patient recruiter, who also was the owner of two home health agencies, was sentenced to 115 months in prison. These conspirators paid illegal bribes and kickbacks to patient recruiters in return for the referral of Medicare beneficiaries many of whom did not need or qualify for home health services.  Medicare paid approximately $66 million on those claims.

Illegal kickbacks in exchange for referrals of Medicare beneficiaries, lack of medical necessity for home health services, failing to meet the guidelines, fraudulent billing, billing for services beneficiaries did not receive and fraudulent documentation continues to plague the home healthcare industry.


Two Big Changes to Florida’s Patient Brokering Act Affect All Healthcare Facilities and Providers

patient brokering act anti kickback healthcare law health lawHas your attorney ever told you to do your best to comply with certain safe harbors to the Federal Anti-Kickback Statute, and you’ll be likely to survive scrutiny under the Florida Patient Brokering Act (the PBA)? If you’ve heard that, it’s time to re-examine that relationship. In the last month, the Patient Brokering Act has been amended, and then interpreted by a court of law in a way that affects all healthcare providers.

The Patient Brokering Act has been used in recent years to prosecute abuses in the addiction treatment industry. Other healthcare providers subject to the act have largely been uninvolved in these prosecutions. However, the PBA has been remolded 4 times in the past 5 years as a means to tailor it to allow for prosecutions of bad actors in healthcare, including addiction treatment. One item should be made clear: the PBA applies to any facility at all that is licensed by the Agency for Healthcare Administration (AHCA) or practitioner licensed by the Department of Health (DOH), including physicians, surgery centers, home health agencies, skilled nursing facilities, hospitals, DME providers, diagnostic imaging facilities, clinical laboratories, pharmacies and many other. During the legislative process, barely any healthcare industry representatives (from any provider group) showed up to any legislative workshops or produced counterbalancing input or language proposals that reflected a broader perspective.Continue reading

State Patient Brokering Act Cases to Throw out Legal Advice as Defense

palm beach county task forceBy: Jeff Cohen

There are two criminal cases pending in Palm Beach County that threaten to put a bullet in the heart of healthcare professionals and businesses and also the law practices that advise them.  Both State v. Simeone and State v. Kigar have a motion from the State pending before them to block any testimony that the defendants received legal advice concerning a contract entered into by an addiction treatment facility and a sober home.  The State alleges that the contract violates the state Patient Brokering Act (PBA) because it was essentially a ruse whereby the addiction treatment facility was just paying for the sober home to refer patients.  Now the State wants to make sure that the entire issue of the defendants being advised by counsel never sees the light of day.

How is this possible?  How can it be that a client can seek legal counsel, get advise (and presumably follow it), and then be blocked from presenting that evidence?  The State argues that the PBA has no wording that requires them to prove intent.  And if intent isn’t an element to be proven, the argument goes, then evidence of the client intending not to violate the law by getting advice beforehand is inadmissible!  Continue reading