Defending Against Allegations of Unlawful Physician “Self-Referrals” and Anti-Kickback Violations

The Stark Law and Anti-Kickback Statute are federal laws that impose civil and criminal penalties for a wide range of practices in the context of providing Medicare and Medicaid-reimbursed health care services. While these statutes are extraordinarily complex, much of their focus is on prohibiting transactions that result in referral fees and other forms of compensation being paid out of federal health care benefit programs. This includes payments made in connection with “self-referrals,” where a physician refers a patient to a health care provider in which he or she owns a financial interest or maintains a financial relationship.

Federal law enforcement and health care agencies such as the Department of Justice (DOJ) and the Department of Health and Human Services’ Office of Inspector General (OIG) have taken a strong stance against Stark Law and Anti-Kickback Statute violations. With the potential for penalties including civil fines, loss of Medicare and Medicaid eligibility, and even federal imprisonment, any health care provider facing an investigation or audit under these statutes must take its situation very seriously. An investigation does not have to lead to a conviction, or even federal charges. Providers accused of paying or receiving unlawful compensation will often have several defenses available.

Safe Harbors and Exceptions in Stark Law and Anti-Kickback Statute Investigations

While the Stark Law and the Anti-Kickback Statute contain broad prohibitions, they both also include numerous safe harbors and exceptions that physicians and other providers can use to insulate themselves from liability. These provisions include (but are not limited to):

• Bona Fide Employment Exception – Under the Stark Law, physicians who are in a “bona fide employment relationship” are entitled make referrals to their employers and receive fair-market-value compensation for their services, provided that their compensation is in no way tied to client referrals.
• Personal Service Contract Exception – Under the Stark Law, physicians can receive compensation through contractual “personal service arrangements,” provided that their compensation is in no way tied to referrals and certain other conditions are satisfied.
• Nominal Non-Monetary Compensation Exception – The Stark Law also includes an exception for nominal non-monetary compensation paid to a physician who provides referrals, once again provided that the compensation and referral relationship are unrelated.
• Anti-Kickback Exceptions – The Anti-Kickback Statute contains an employment exception similar to the Stark Law exception discussed above, and includes various other exceptions that apply to service and prescription drug discounts, payments to purchasing agents, and risk-sharing arrangements.
• Anti-Kickback Safe Harbors – The Anti-Kickback Statute includes “safe harbor” provisions that establish guidelines for lawful compensation relationships. When these guidelines are followed, a payment will not trigger liability even if it otherwise constitutes a violation of the statute. Safe harbors exist for facility and equipment leases, certain types of investments, personal services contracts, practice sales, referral services, discount and group purchasing programs, and a variety of other contractual relationships.

Raleigh Federal Criminal Defense Attorneys for Physicians and Health Care Providers

If your business or practice is facing a federal investigation or health care contractor audit, we can help. Our attorneys bring decades of experience to representing clients accused of federal health care law violations in North Carolina. To get started with a confidential initial consultation, please call (919) 833-3114 or submit our online contact form today.