Anti-Kickback and Stark Compliance


Sansweet, Dearden and Burke, Ltd. (SDB) advises clients on compliance with fraud and abuse statutes. Health care providers who refer business to other providers must comply with the many federal and state laws that govern these arrangements. The primary federal laws are the Anti-Kickback Statute and the Stark Law. In addition, many states have additional restrictions on kickbacks, self-referrals, and other financial relationships among health care providers.


Anti-Kickback Statute

The Anti-Kickback Statute is a criminal statute that prohibits any person from paying, receiving, soliciting or offering remuneration for the referral of federal health care program business. Violations are punishable by imprisonment for up to five years and large fines. Providers who are convicted under the Anti-Kickback Statute are automatically excluded from federal health care programs, including Medicare and Medicaid. In addition, the government may assess civil monetary penalties for each violation of the Anti-Kickback Statute, as well as treble damages. However, some financial relationships are protected by “safe harbors,” which are exceptions for certain practices thought to present a low risk of abuse.


The Stark Law

The Stark Law prohibits physicians from referring certain Medicare or Medicaid patients to entities with which they have financial relationship. Unlike the Anti-Kickback Statute, the Stark Law only applies to physician referrals for “designated health services.” Designated health services include: radiology services, laboratory services, physical therapy and occupational therapy, durable medical equipment (DME), prosthetics and orthotics, and outpatient prescription drugs. Violation of the Stark Law may result in civil monetary penalties and larger penalties for “circumvention schemes.” In addition, physicians and entities that violate the Stark Law may be excluded from federal health care programs, including Medicare and Medicaid. There are several exceptions to the Stark Law’s prohibitions, including for physician services, in-office ancillary services, and academic medical centers. When the requirements for these exceptions are met, such referrals will not result in Stark Law liability.


The False Claims Act

The False Claim Act imposes civil liability on any person who knowingly presents, or causes to be presented, a false or fraudulent claim for payment to the federal government. Violations of the False Claims Act are punishable by civil penalties for each claim submitted in violation of the False Claims Act plus treble damages. Under the Affordable Care Act, violations of the Anti-Kickback Statute are automatically deemed false claims. Stark Law violations may also constitute false claims.


Our firm has significant experience with the Anti-Kickback Statute, the Stark Law, and related state laws. SDB attorneys analyze the risks of specific transactions and assist our clients in structuring arrangements that comply with the various federal and state restrictions noted above. Our firm also advises clients with regard to the preparation and implementation of compliance plans. As the government increases enforcement efforts, health care providers must be aware of potential fraud and abuse liabilities in their business arrangements, and SDB can be of assistance in dealing with these potential risk areas.