Source: https://www.healthcarelaw-blog.com/healthcare-whistleblower-claims-based-on-self-referral-arrangements/
Timestamp: 2019-04-24 16:41:09+00:00

Document:
Two federal laws regulate referrals and financial arrangements between healthcare providers and facilities – Stark Law and the Anti-Kickback Statute.1 These laws have recently been at the center of important healthcare whistleblower fraud cases. While both serve the same essential purpose – to eliminate improper financial incentives that interfere with independent medical judgment and good patient care – they do so in slightly different ways and contexts.
Like the Stark Act, the AKS excludes certain transactions and payment arrangements.13 The U.S. Department of Health & Human Services Office of Inspector General (OIG) has also adopted safe harbors excluding certain business and financial practices from criminal and civil prosecution, provided that they are within parameters defined to minimize the risk of possible corruption.14 Transactions which are not specifically excluded or granted safe harbor protection are evaluated by the OIG on a case-by-case basis,15 and parties facing uncertainty over specific arrangements can seek an advisory opinion from the OIG.
A recent example of a successful healthcare whistleblower lawsuit involving alleged Stark Law violations is the case of U.S. ex rel. Baklid-Kunz v. Halifax Hospital Medical Center and Halifax Staffing, Inc.19 In the suit, filed in 2009 by Halifax Hospital’s former director of physician services, the hospital was accused of improperly compensating medical oncologists and neurosurgeons for referring patients to the hospital for procedures. The government intervened and sought to recover over $34 million in fraudulent Medicare claims it contended were the result of an unlawful compensation plan that paid doctors bonuses based on the net operating margin of the hospital’s medical oncology program. With treble damages and civil penalties under Stark Law, the hospital faced a possible damage award exceeding $1 billion. In March 2014, on the eve of trial, the hospital agreed to pay $85 million to settle the government’s claims.
Given the serious consequences, physicians, healthcare providers or their employees who have questions about the legality of a contractual or other arrangement regarding medical services should seek qualified legal counsel to review the contract and circumstances and provide guidance on the potential serious legal issues and obligations she faces regarding with the same.
1 18 U.S.C. §1395nn (Stark Law); 42 U.S.C. §1320a-7b(b) (Anti-Kickback Statute).
7 42 U.S.C. § 1395nn(g)(3)-(4).
8 42 U.S.C. § 1320a-7b.
9 42 U.S.C. § 1320a-7b(b).
10 42 U.S.C. § 1320a-7(a).
11 42 U.S.C. § 1320a-7(b).
12 42 U.S.C § 1320a-7a(a)(7).
13 42 U.S.C. § 1320a-7b(b)(3).
14 42 C.F.R. § 1001.952.
15 See Office of Public Affairs, Office of Inspector General Department of Health & Human Services, Fact Sheet November 1999, Federal Anti-Kickback Laws and Regulatory Safeharbors.
16 31 U.S.C. §§ 3729-3733.
17 See U.S. ex rel. Pogue v. American Heatlhcorp., 914 F.Supp. 1507 (M.D. Tenn. 1996); U.S. ex rel. Pogue v. Diabetes Treatment Centers of America, Inc., 238 F.Supp.2d 258 (D.D.C. 2002); U.S. ex rel. Thompson v. Columbia/HCA Healthcare Corporation, 125 F.3d 899 (5th Cir. 1997).
19 Case No. 6:09-cv-1002-Orl-31TBS, United States District Court for the Middle District of Florida.
20 For example, fines under Stark Law are up to $15,000 for each instance of a prohibited referral and $100,000 for each prohibited referral arrangement. 42 U.S.C. 1395nn(g)(4).
21 See CMS Voluntary Self-Referral Disclosure Protocol, OMB Control No. 0938-1106.

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