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What works in other industries, often does not work in the healthcare industry. It is important to understand that while it is absolutely common to pay for business on a quid-pro-quo basis in many any other industries, healthcare laws strictly forbid direct compensation for patient referrals. The two federal statutes that are primarily responsible for this prohibition on compensation for referrals are the Anti-Kickback Statute and the Stark Law. Although both statutes are similar in nature, the notable differences between the statutes are outlined below.
- What Is the Anti-Kickback Statute? The Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)) prohibits anyone from soliciting or receiving remuneration of any kind in exchange for referring a patient for services for which a federal healthcare program pays or for purchasing an item or service for which a federal healthcare program pays.
- What is the Stark Law? The Stark Law (42 U.S.C. § 1395nn) limits a physician’s ability to refer Medicare/Medicaid patients to a health service provider in which the referring physician (or his immediate family member) has a financial interest and bars health service providers from billing Medicare/Medicaid for medical services performed pursuant to a prohibited referral.
- Applicable Federal Health Care Programs: The Stark Law is limited to Medicare and Medicaid; the federal Anti-Kickback Statute applies to all government funded health care programs, including TRICARE and patients under the Department of Labor programs.
- Source of Prohibited Referrals: Whereas the Stark Law only pertains to referrals from physicians, the Anti-Kickback Statute applies to referrals from anyone. That said, anyone can violate the federal Anti-Kickback Statute by illegally referring patients, but only physicians can violate Stark Law’s self-referral prohibitions.
- Type of Services Involved: The Anti-Kickback Statute covers all services or items for which payment is sought from a government health care program. On the other hand, the Stark Law only applies to an express list of “Designated Health Services” (DHS) composed of: (1) clinical laboratory services; (2) physical therapy services; (3) occupational therapy services; (4) outpatient speech-language pathology services; (5) radiology and certain other imaging services; (6) radiation therapy services and supplies; (7) durable medical equipment and supplies; (8) parenteral and enteral nutrients, equipment, and supplies; (9) prosthetics, orthotics, and prosthetic devices and supplies; (10) home health services; (11) outpatient prescription drugs; and (12) inpatient and outpatient hospital services.
- Exclusions: The Anti-Kickback Statute enumerates certain optional safe harbors, whereas the Stark Law expressly excludes a number of “exceptions” from the purview of the law.
- Intent Required to Violate Act: To prove a violation of the Anti-Kickback Statute, prosecutors must demonstrate that a person “knowingly and willfully” violated the law. The Stark Law holds a physician/DHS strictly liable for reimbursing the government for any monies received in violation of the law, but it requires a person to have knowingly violated the law in order to receive a civil monetary penalty.
- Penalties for Violation: The penalties for violation of the Stark Law are limited to civil penalties, such as denial of payment, fines, reimbursement, and False Claims Act liability. The Anti-Kickback Statute provides for criminal punishment in addition to civil sanctions. A violation of the Anti-Kickback Statute constitutes a federal felony punishable by up to 5 years in prison and up to a $25,000 fine for each violation.
About Our Practice
The Oberheiden & McMurrey, LLP is a team of former healthcare prosecutors and experienced trial attorneys who handle complex healthcare and business litigation throughout the United States. We advise healthcare providers, business owners, and executives on all issues of healthcare law. Additionally, our healthcare fraud defense attorneys assist service providers and businesses under investigation for alleged Stark Law, False Claims Act, or Anti-Kickback violations.
If you need assistance with a Stark Law or Anti-Kickback Statute investigation, you should contact the experienced attorneys at Oberheiden & McMurrey, LLP. Get a free and confidential consultation and benefit from talking to former federal and state prosecutors and experienced litigators.