The Intersection of Stark, Anti-Kickback, and False Claims

Healthcare transactions face many regulatory and legal hurdles. You face the intersection of three different main laws in this area. The Stark Law, False Claims Act, and the Anti-Kickback statute place significant restrictions and possible penalties on your healthcare transactions. Knowing how these laws overlap and work together can help you avoid significant legal penalties.

The healthcare mergers and acquisitions attorneys at Daniels, Porco & Lusardi, LLP can help you navigate this incredibly complex legal framework. Let us help you identify your risks and move forward intelligently with your healthcare transaction.

How the Stark Law May Impact Your Healthcare Transactions

The Stark Law forbids physicians from referring any patients on Medicare or Medicaid to certain entities, if that physician has or their immediate family members have a financial relationship with that entity. There are exceptions that might apply to your unique situation. However, they can be difficult to identify and navigate.

The Stark statute imposes strict liability on violators. This means that even if you never meant to violate the law, you could still trigger its penalties. With the help of counsel, ensure all compensation agreements meet some Stark exception, such as it being commercially reasonable, of fair market value, and more. Be sure to document all of your financial relationships in detail and conduct regular self-audits of your healthcare transactions.

How Does the Anti-Kickback Statute Apply to My Healthcare Transaction?

This statute criminalizes conduct where a person knowingly pays, offers, solicits, and or receives remuneration to induce services reimbursable by federal healthcare programs. This statute requires an intent to commit the act. However, its broad language means that your perfectly innocent actions could violate the law.

Common risk areas your attorney can help you watch for include, but are not limited to:

Your marketing arrangements with any third-party vendors
Any rebates, discounts, or free services your receive if they are tied to referrals
Investments or joint ventures that involve you and referring providers

To avoid these kinds of issues, you can have your attorney structure your healthcare transactions within anti-kickback safe harbors. If you receive payments as referral incentives, or are offered them, have your attorney vet whether it is legal and appropriate. Also, train your staff on how to recognize and report potential or actual violations. Better safe than sorry in this legal area.

The False Claims Act and Its Impact on Your Practice

The False Claims Act punishes individuals or practices that knowingly submit fraudulent or false claims to the government. Violations of the other two acts above can also trigger False Claims Act liability if it relates to improper billing. Regulators and whistleblowers utilize this act as a powerful enforcement tool.

Danger zones under the FCA include:

Failing to disclose Stark or AKS violations you are aware of
Keeping overpayments without providing a timely refund
Submitting any claims for service that are prohibited referral arrangements

How to Stay Compliant and Avoid These Legal Intersections

Violating one statute can often violate the others automatically. There are multiple ways you can accidentally or purposefully violate these laws. Or, one of your employees or agents could expose your practice to liability if you are not careful.

To stay compliant, consider these strategies for your practice:

Review Your Contracts and Compensation Models: Look for exceptions to the Stark Law or AKS safe harbors.
Educate Your Employees and Stakeholders: Provide regular training for anyone you work with so everyone knows what to avoid.
Hire Experienced Legal Counsel: You should hire an attorney well-versed in healthcare transaction law and compliance.

Avoid the Dangers of These Three Important Statutes

Compliance with Stark, AKS, and FCA is essential. The financial and reputational risks of not following these regulations are significant. These risks include civil penalties, exclusion from federal programs, and criminal charges. By understanding how these laws intersect and putting in place strong compliance protocols, providers can protect their organizations and deliver care with integrity.

Consult with the dedicated healthcare transaction attorneys at Daniels, Porco & Lusardi, LLP for help with your case. Contact us today for a consultation.