When it comes to high-stakes legal matters, the Texas health care law attorneys at Sumner Schick LLP have a strong track record of providing physicians and medical providers with innovative, effective solutions. With extensive experience advising clients on self-referral laws, a health care compliance attorney from our firm can assist you with issues related to the federal Anti-kickback Statute (the “AKS”), Stark Law (“Stark”), and the False Claims Act (the “FCA”).
We have specialized expertise in these complex federal health regulations and have successfully helped clients avoid penalties in matters throughout the United States. Our health care practice is led by Vern Clemons, a health care law expert with extensive industry knowledge, advanced degrees in law and compliance, and more than fifteen years of experience helping physicians and medical providers with issues related to self-referrals.
The second member of our health care team is Nicole Ward. Nicole has experience conducting compliance audits to ensure clients adhere to all federal and state rules and regulations, including but not limited to, the HIPAA Privacy and Security Laws and the HITECH Act. She has also represented clients in a broad range of matters stemming from participation in federal and state health care programs, including AKS and Stark claims, FCA cases, self-disclosure/report and refund obligations, and before professional licensing boards.
Greg Butz is the third member of our health care team. Greg has experience helping clients navigate various health care laws and regulations. He is also well-versed in contract drafting and negotiation, as well as legal research and writing.
Generally, the AKS, Stark, and the FCA prohibit healthcare providers from receiving virtually anything of value in exchange for referrals of patients covered by federally sponsored health care programs. These are notoriously complicated laws of which medical providers must be in full compliance. The following briefly discusses these statutes.
- The AKS: The AKS prohibits any individual from offering, paying, soliciting, or receiving “remuneration” to induce or reward referrals or generate federal health care program business. Courts interpret the scope of this term in a broad manner. Remuneration can be virtually anything, including cash, goods, services, or donations. Further, even if only one purpose of a given arrangement is to induce referrals, the AKS is still violated and providers can still face penalties.
- Stark: Stark prohibits a physician from referring a patient covered by a federal health care program to an entity for designated health services (“DHS”) if the physician (or the physician’s immediate family member) has a financial relationship with that entity. Stark defines a “referral” in two different ways depending on the type of coverage. For Medicare Part B (see below), “referral” means “the request by a physician for the item or service.” For all other federal programs, “referral” means “the request or establishment of a plan of care by a physician which includes the provision of DHS. Stark defines “financial interest” as either an ownership interest, investment interest, or compensation arrangement.
- The FCA: The FCA prohibits any individual or entity from “knowingly present[ing] or make[ing] a false claim to the government.” The FCA dates back to the Civil War era, and can be applied in many instances that involve fraud against the federal government. Due to their size and importance in the American health care industry, federal health care programs often implicate the FCA. Within this sphere, FCA violations can arise from a variety of scenarios, including overbilling, billing for services that were not medically necessary, and billing for services that were not performed.
Frequently Asked Questions
What are the Goals of the AKS, Stark, and FCA?
The AKS, Stark, and FCA act as a way of dealing with governmental waste. Congress passed these statutes to protect against overspending, fraud, and abuse.
How do the AKS, Stark, and FCA Differ?
Although there are some important similarities, there are also key differences between the AKS, Stark, and FCA.
To start, the AKS covers a broad range of medical services, whereas Stark only applies to DHS. Stark defines DHS as any of a list of twelve items or services, including clinical laboratory services, physical therapy services, and outpatient prescription drugs.
Under the AKS, prohibited conduct must be made “willfully or knowingly” to be illegal. This means an individual must at least know what they are doing is wrong. The individual does not necessarily need to know that they are specifically violating the AKS, only that their conduct is generally improper.
Conversely, Stark is a strict liability law. This means that a provider can be completely unaware that their referral is improper and still face penalties. Further, Stark makes no differentiation between technical violations (like forgetting to sign a contract) with blatant, purposeful conduct that violates the law. This underscores the importance of a provider’s awareness of their obligations under Stark.
Like the AKS, the FCA prohibits an individual or entity from “knowingly” submitting a false claim, including deliberate indifference or reckless disregard.
Finally, both the AKS and the FCA apply to any individual or entity, physician or otherwise. Stark, on the other hand, applies to only physicians, their immediate family members, and health care entities.
What Health Care Programs Do the AKS and Stark Apply To?
The AKS and Stark apply to medical providers who receive money through federal health care programs. The federal government has three major health care programs: Medicare, Medicaid, and Tricare.
Medicare is a federal program that provides health care to individuals who are at least 65 years old, or to individuals with certain disabilities. Medicare is further split into two types of coverage: Part A and Part B. Part A covers charges for services such as inpatient hospital stays. Part B covers outpatient charges that do not require an overnight stay at a hospital, such as doctors’ visits, lab work, MRIs, and CAT scans.
Medicaid is a federal and state program that provides health care to individuals and families with limited incomes.
Tricare is a federal program that provides health care to active duty military personnel, veterans, and their dependents.
What are the AKS Safe Harbors?
Standing alone, the AKS would make it extremely difficult for anyone in the health care field to do business in the realm of federal health care programs. Fortunately, the Code of Federal Regulations provides for Safe Harbors. Safe Harbors allow for certain conduct that is otherwise prohibited by the AKS if certain conditions are met.
There are many Safe Harbors. Examples of common Safe Harbors include arrangements regarding the rent of office space or equipment, bona fide employment relationships, and certain types of service agreements. Each Safe Harbor has multiple elements. Every single element must be met to qualify for Safe Harbor protection. Even if only one element is not satisfied, an individual can be exposed to AKS enforcement and penalties. As such, Safe Harbors are the most complicated facet of the AKS. Therefore, it is essential for providers to retain the services of an experienced health care compliance attorney.
What are Exceptions to the Stark Law?
Stark allows for exceptions. If a referral is structured to fit within an exception, a provider will be protected from Stark penalties. Examples include the rental of office space or equipment, referrals to labs that are part of the same group practice, and certain service contracts. As with AKS Safe Harbors, all Stark exceptions have multiple elements. To be protected by an exception, each specific element must be met. Providers who believe they qualify for such exceptions should seek the advice of an experienced health care compliance lawyer to ensure they have the proper strategy in place. Careful and complete compliance with federal regulations is a must.
Who are FCA Whistleblowers?
FCA violations are often brought by “whistleblowers.” Whistleblowers can be any non-governmental entity or individual, including employees and competitors. Whistleblowers must be an “independent source,” meaning they must “have direct and independent knowledge of the information on which the allegations are based and voluntarily provide that information to the [g]overnment before bringing suit.” Whistleblowers may then bring a civil “qui tam” suit on behalf of the government where they may be entitled to 15% to 30% of the proceeds recovered from the lawsuit.
What are the Penalties for a AKS Violation?
Violations of the AKS can result in substantial criminal penalties. These penalties apply to any party of a business arrangement. The Department of Justice (DOJ) enforces the criminal penalties of the AKS. The criminal penalties include fines of up to $100,000 and ten-years’ imprisonment.
Violations of the AKS may also result in civil penalties. The Office of the Inspector General (the “OIG”), a division of the Department of Health and Human Services (the “HHS”), enforces the civil penalties of the AKS. These civil penalties are adjusted each year for inflation. As of 2019, the civil penalties include fines up to $102,522.00.
What are the Penalties for a Stark Violation?
While a violation of Stark will not result in criminal penalties, it could result in massive civil penalties. Both the referring physician and the health care entity could be liable for:
- Up to a $100,000 penalty for each violation;
- A refund of the fee collected by the provider that received the referral;
- Exclusion from federal and state health care programs; and
- Payment of fines of up to $15,000 for each service that a provider “knows or should know” is a Stark violation;
This list is non-exhaustive and may include other penalties that federal regulatory agencies deem appropriate.
What are the Penalties for a FCA Violation?
FCA violations can result in both criminal and civil penalties.
Criminal penalties include fines and jailtime. Typically, when a whistleblower reports a violation, the DOJ investigates the report and decides whether to bring criminal charges against the alleged party.
Whistleblowers may also bring a civil suit on behalf of the government, which may result in fines ranging in the tens of thousands of dollars, plus triple the amount falsely paid to the infringing party.
Call Our Dallas, TX Health Care Law Attorneys for Immediate Assistance
At Sumner Schick LLP, our Texas health care compliance attorneys are skilled and effective advocates for our clients. We have a comprehensive understanding of self-referral laws. If you have questions about the AKS, Stark, FCA, or any other related issue, we can help. To set up a confidential, no obligation legal consultation, please contact our firm today. With an office in Dallas, we provide health care law services throughout North Texas, including Fort Worth, Denton, Frisco, Arlington, and Grapevine.