Stark Law and Anti-Kickback Statutes

Whistleblower attorney Tony Munter discusses a law and statute that each play a big role in healthcare fraud and whistleblowing. To learn more about these or other laws and statutes call today and schedule a free consultation.

What is The Stark Law?

The Stark Law prohibits certain kinds of referrals by physicians to hopefully make it less possible for physicians to simply refer business to entities that they have a financial interest in. This thereby cuts down on the idea that a doctor might be prescribing treatments or physicians or treatments or drugs or medical devices or lab work or whatever that otherwise they wouldn’t.

We’re trying to take a little bit of the financial incentive to take more kinds of medical treatments out of the process. So, it prohibits that kind of thing and it’s a pretty technically specific set of circumstances that requires physicians not to have direct financial incentives when they’re making referrals to particular medical providers where they have a financial interest to do so. That’s the Stark Law.

Now, the Stark Law creates all kinds of penalties and it’s very serious and very strict and one of the things that it creates as a penalty is if you’re in violation of the Stark Law, it’s pretty much automatically also a False Claims Act violation. So, when you see a Stark Law violation it’s relatively easy to establish such a violation as being a false claim under the federal False Claims Act and of course that makes it possible to file a pretty good False Claims Act (pdf) case. And so, people are looking at that and under all kinds of medical care cases.

What is The Anti-Kickback Statute? How Does it Work?

Well, the anti-kickback statute is a little broader. It involves a question of whether or not somebody was induced, whether or not there was an attempt to pay somebody for referral or pay somebody in order to make money or make any kind of gain in medical care. And I think the thing about the anti-kickback statute again is a violation of it also creates pretty much an automatic False Claims Act case.

You just can’t provide an incentive to somebody for medical care that amounts to a quid pro quo, it punishes both sides, it punishes the person’s soliciting a referral or essentially if you want to call it a bribe to get medical business and it punishes the person who receives the incentive.

And, the anti-kickback statute makes it very clear that these incentives don’t have to be cash, they can be any thing of value. But if you have one entity providing a financial incentive to another entity in order to get a patient referred and use Medicare or Medicaid and use government funds for medical services, you have an anti-kickback statute violation and that can make for a very, very strong False Claims Act case.