Stark Law and Anti-Kickback Statute

Raleigh Healthcare Fraud Defense Lawyers Serving Physicians and Other Providers Statewide

The Stark Law and the Anti-Kickback Statute are federal laws that prohibit the solicitation, payment and receipt of patient referrals and compensation for patient referrals under a broad range of circumstances. Both laws apply in cases where payment for services rendered is to be made through a federal benefit program (such as Medicare or Medicaid), making violations of the Stark Law and the Anti-Kickback Statute a form of healthcare fraud. If you or your business is under investigation for participating in unlawful referrals or kickbacks, you need to speak with a healthcare fraud defense attorney as soon as possible.

Improper Physician “Self-Referrals” Under the Stark Law

The Stark Law makes it illegal for physicians to make referrals for certain “designated health services” to entities with which the physician or an immediate family member has a financial relationship. It also prohibits the entities that receive these so-called “self-referrals” from billing Medicare or Medicaid for referred services — meaning that both the referring physician and the provider can face penalties under the Stark Law.

Under the Stark Law, a “financial relationship” includes ownership and investment interests as well as compensation relationships. “Designated health services” include:

  • Clinical laboratory services
  • Durable medical equipment and supplies
  • Home health services
  • Inpatient and outpatient hospital services
  • Occupational therapy services
  • Outpatient prescription drugs
  • Outpatient speech-language pathology services
  • Parenteral and enteral nutrients, equipment and supplies
  • Physical therapy services
  • Prosthetics, orthotics and prosthetic devices and supplies
  • Radiology and certain other imaging services
  • Radiation therapy services and supplies

Critically, the Stark Law is a strict liability statute. This means that physicians and providers can face fines, exclusion from federal healthcare benefit programs and other penalties without proof that they intended to violate the law.

Unlawful Compensation for Medicare and Medicaid Referrals

As stated by the U.S. Department of Health and Human Services: “In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime.”

The Anti-Kickback Statute prohibits all forms of payment in exchange for referrals where Medicare or Medicaid will pay for the services, medications, equipment or supplies provided to the patient. This includes much more than just standard referral fees. Excessive compensation, free access to facilities, travel and meals, and other gifts and forms of remuneration will all trigger the prohibitions of the Anti-Kickback Statute. Like the Stark Law, the Anti-Kickback Statute imposes penalties for all parties involved in the unlawful transaction.

Violations of the Anti-Kickback Statute can be charged as civil or criminal offenses. Potential penalties include:

  • Exclusion from federal healthcare benefit programs (including Medicare and Medicaid)
  • Federal imprisonment
  • Fines
  • Penalties of up to $50,000 per illegal kickback
  • Treble (triple) damages

Defending Against Allegations of Illegal Referrals and Kickbacks

There are several potential defenses to alleged violations of the Stark Law and the Anti-Kickback Statute. Both laws contain a range of exceptions and safe harbors, and, depending on the circumstances, you may have other defenses available as well. The key to protecting yourself and your business will be to intervene in the government’s investigation as early as possible. With experienced legal representation, you may be able to resolve the investigation before it leads to civil or criminal charges.

Speak with a Raleigh Healthcare Fraud Defense Lawyer at Cheshire Parker Schneider

For more information about defending against a federal Stark Law or Anti-Kickback Statute investigation, contact the Raleigh healthcare fraud defense attorneys at Cheshire Parker Schneider. To schedule a confidential consultation, call (919) 833-3114 or contact us online now.