Violations of Stark Anti-Kickback Statute = Record Breaking Judgments in 2015
Posted September 1, 2016
A review of Stark prosecution highlights of 2015
The Stark statute, 42 U.S.C. § 1395nn, prohibits a physician from referring a Medicare patient for specific health services to any entity with which the physician (or an immediate family member of such physician) has a financial relationship. The entity receiving the referral may not then bill Medicare, any individual, third party payor, or other entity for the specific health service furnished pursuant to a prohibited referral. Stark law violations are actionable in and of themselves and under the False Claims Act, 31 U.S.C. § 3729-3733. A key element of any violation of Stark is the referral made by the physician.
The U.S. Department of Justice actively enforces Stark via both civil and criminal litigation. However, whistle blowers may also file civil suits, as qui tam actions, against physicians and entities violating Stark. The financial reward to successful whistle blower can be substantial: 15-25% of proceeds if government intervenes; 25-30% if it does not. Attorneys’ fees are also covered in these suits. Fraud and Abuse Primer, AHLA-PAPERS P03310418.
Civil enforcement of Stark by both the Department of Justice and qui-tam plaintiffs has resulted in 1.9 billion in settlements and judgments from companies and individuals in the health care industry for: (1) allegedly paying kickbacks to health care providers to induce the use of certain goods and services, (2) providing unnecessary or inadequate care, or (3) overcharging for goods and services paid for by Medicare, Medicaid, and other federal health care programs. Specific settlements involving violations of the Stark Law include: Adventist Health System for $115 million, an organization that operates hospitals and other health care facilities in 10 states; North Broward Hospital District for $69.5 million, a special taxing district of Florida that operates hospitals and other health care facilities in Broward County, Florida; and Georgia hospital system Columbus Regional Healthcare System and Dr. Andrew Pippas for $25 million. Id.
In fact the Department of Justice relies heavily on qui tam suits for both enforcement of the False Claims Act and Stark. Id. Of the $3.5 billion the Department of Justice recovered in fiscal year 2015, more than $2.8 billion related to lawsuits filed under the qui tam provisions of the False Claims Act. Id. Individual whistle blowers filing qui tam actions received $597 million. Id. From January 2009 to the end of fiscal year 2015, the government recovered $19.4 billion in settlements and judgments related to qui tam suits and paid whistleblower awards of $3 billion during the same period. Id.
In addition to an individual plaintiff a crucial element in bringing a qui tam case based on violations of Stark, is proving the referrals. NPI Dashboard (hereinafter “NPI”) has made proving referrals a simple matter of purchasing this data.
NPI is a software platform specializing in medical referral data. NPI can customize referral data for its clients by physician, business entity, hospital, or region of the country. As of 2015, NPI has made proving the referrals in a Stark suit almost effortless for its clients by making referrals from practice groups or organizations or hospitals readily available in many compatible formats. NPI clients can save all the time and effort normally expended in researching physician referral data. Even more importantly, since fines for Stark violations are fined $15,000 per violation plus treble damages and/or $100,000 per circumvention scheme, NPI’s data can insure that NPI’s clients never miss a single referral in violation of Stark.
The Stark Law is related to, but not the same as, the federal anti-kickback law. The anti-kickback law, 42 U.S.C. §1320a-7b(b), prohibits knowingly and willfully soliciting or offeringany remuneration (kickback, bribe or rebate) directly or indirectly, in cash or in kind, to induce or rewardthe referral, purchase, order, lease or recommendation of any item or service that may be paid for under a federal healthcare program.
 U.S. Dep’t. of Justice, Office of Public Affairs, Justice Department Recovers Over $3.5 Billion From False Claims Act Cases in Fiscal Year 2015 (2015), https://www.justice.gov/opa/pr/justice-department-recovers-over-35-billion-false-claims-act-cases-fiscal-year-2015.