The federal government instituted the Anti-Kickback Statute and Stark Law in an effort to eliminate healthcare fraud and abuse. Simply stated, both regulatory laws prohibit medical providers and/or entities from making health service referrals in exchange for compensation of any kind.
In this article, the skilled healthcare fraud attorneys from Westfall Sellers will help you understand each law, the differences, and advise you on when to find a Stark Law attorney.
What is considered a kickback?
In terms of the law, a “kickback” refers to the misuse of funds that benefits a person with power or influence to help make another person/organization richer. Kickbacks can come in different forms including money, products, gifts, credit, or anything of value.
In the medical field, the Anti-Kickback Statute (AKS) (42 U.S.C. § 1320a-7b(b)) prohibits any provider or entity from “willingly and knowingly” giving or receiving money, services, or things in exchange for patient referrals or purchasing goods and services. These can be as subtle as accepting or offering free items, cash, gift cards, and event tickets in exchange for purchasing or selling their products.
AKS Safe Harbors
Safe harbors are payment, referrals, and business practices that the government will not prosecute. These arrangements are exempt from civil and criminal prosecution as they have been determined not to be of corrupt intent. For an agreement to constitute as a safe harbor, there must be a signed contract of at least one year that clearly states the specificities of the agreement including compensation tied to fair market value.
These safe harbors include:
- Compensation for legitimate employees
- Personal services
- Management contracts
- Space and equipment leases
- Investment in ambulatory surgical centers
- Joint ventures
- Complimentary transportation
Please note that this is not an exhaustive list of safe harbors. Your agreement may still be in compliance with the AKS. Call a Stark Law attorney if you have questions about any of your agreements.
Anti-kickback statute examples
Any offer to a physician or entity that aims to increase referral rates in exchange for something of value is considered a violation of the Anti-Kickback Law. Here are a few examples:
- Receiving a performance bonus tied to the number of lab tests ordered at the hospital
- Use of free or discounted office space, access to administrative support staff, or equipment
- Payment for a physician’s travel and expenses for conferences
- Kickbacks paid through “consultant fees” for services that require few substantive duties by the physician
Possible penalties for violating the AKS
A violation of the Anti-Kickback Law is considered a federal felony and can severely affect your reputation, profession, and personal life. To prove a violation, there must be evidence that the person or entity “knowingly and willfully” violated the law. Possible civil sanctions and criminal penalties per violation include:
- Fines up to $25,000
- Up to 5 years in prison
- False Claims Violation act penalties
- Civil monetary penalties and program exclusion
- Civil fines up to $50,000
- Civil assessment of up to three times the amount of kickback
- Loss of medical license
If you’re facing audits, investigations, or subpoenas due to accused AKS violations or prescription fraud in Texas, don’t wait to seek legal counsel from Westfall Sellers. Our experienced healthcare fraud defense attorneys can help negotiate for lesser penalties and will work aggressively to avoid criminal prosecution.
The Stark Law
What does the Stark Law prohibit?
The Stark Law (42 U.S.C. § 1395nn), originally named the Patient Referrals Act, prohibits a physician from referring Medicare or Medicaid patients to an entity with which the physician or immediate family member has a financial relationship. These Designated Health Services include:
- Lab tests or clinical laboratory
- Physical therapy
- Occupational therapy
- Out-patient speech-language pathology
- Radiology and other imaging
- Radiation therapy and supplies
- Medical supplies
- Medical equipment
- Nutritional services
- Prosthetics, orthotics, and prosthetic devices and supplies
- Home health
- Inpatient or outpatient hospital services
- Outpatient prescription drugs
Continue reading: What is the false claims act in healthcare?
Exceptions under Stark
Like the Anti-Kickback safe harbors, these arrangements have to be in writing, signed by both parties, specific to what’s being provided, must be for at least a 1-year term, and must not take into account the volume of referrals. Common exceptions include but are not limited to:
- Bona fide employment agreements
- Personal services arrangement
- Certain space and equipment leases
- Referral to certain physicians in the same group
- Non-monetary compensation (off-campus meals, gift baskets, flowers, holiday gifts, etc.)
- Medical staff incidental benefits (meals, parking, pagers, etc.)
- Indirect compensation if referral volume is not taken into account
- Academic Medical Center (AMC)
Stark Law examples
Since the Stark Law doesn’t take into account intent as the AKS does, physicians can accidentally violate it with events like coding errors or referrals. On the other hand, some companies and physicians know exactly what they’re getting themselves into. Here are five examples of Stark Law violations:
- Referring patients to an imaging center you have invested in
- Improper billing codes resulting in a greater reimbursement (whether intentional or accidental)
- Allowing a specialized medical group to use your office for free or for a reduced rent
- Paying specific physicians higher than market value salaries
- Referring a patient for medically unnecessary procedures or testing
Penalties for violating the Stark Law
The penalties for violating Stark or committing Medicaid billing fraud can be severe. Unlike the Anti-Kickback Statute, the Stark Law is a strict liability statute. This means that proof of intent is not needed to be subject to penalties, even if it’s an accident.
Civil penalties per violation include:
- Exclusion from Medicare or Medicaid reimbursement
- Overpayment/refund obligation
- False Claims Act liability
- Civil monetary penalties and program exclusion for knowing violations
- Potential CMP for each service
- Civil assessment of up to three times the amount claimed
What is the difference between Stark and Anti-Kickback?
The Stark Law and the Anti-Kickback Law are very similar with a few key differences. The Anti-Kickback Law covers referrals for all services from anyone including physicians or pharmaceutical companies. Conversely, the Stark Law is for referrals from physicians only and covers a set list of “Designated Health Services” (DHS).
One of the other main differences is that the Stark Law is limited to Medicare or Medicaid and the ACK Law is applicable to all government-funded healthcare programs. Penalties for Anti-Kickback can include criminal penalties like jail time, while the highest penalty for Stark violations are civil penalties like fines and False Claims Act liability.
How can a healthcare fraud defense attorney help?
The penalties for The Anti-Kickback Statute and Stark Law can be hefty and may result in everything from steep fines to jail time and even the loss of your medical license. Don’t battle it alone. A healthcare fraud defense attorney can:
- Guide you on gathering evidence that refutes any claims
- Disprove fraudulent intent
- Decrease or avoid civil or criminal punishments
- Defend your name and your practice
- Provide legal advice on exceptions
- Identify or establish safe harbors and ensure all arrangements are legal
- Determine whether your practice is in compliance with the AKS and Stark Law
- Navigate private insurance company investigations
Contact Fort Worth’s best Anti-Kickback and Stark Law attorney
If you think you may be suspected of or are facing a violation of the Anti-Kickback Statute and Stark Law, one of the first things you should do is call the healthcare fraud attorneys at Westfall Sellers. We use an aggressive, client-focused, team approach to help you decrease, and potentially avoid, any severe fines, loss of your practice or medical license, withheld reimbursements, or jail time.
No case is too complex for our Fort Worth defense lawyers. To discuss how we can help, schedule a free consultation online or give us a call at 817-928-4222.
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