What is Stark Law and Anti-Kickback Statute?

In healthcare industries, regulations are not always easy to comply with but two laws and regulations stand out as ones that savvy business owners and operators should always keep in mind: anti-kickback laws, and the Stark Law.

The first, anti-kickback laws, state that while paying for referrals or leads is typically the norm in most non-healthcare industries, rewarding others for referrals or paying for them in any way for these leads is a crime in the healthcare world.

Put more simply, anti-kickback laws prevent doctors from rewarding patients in any way for patient referrals. The same goes for insurance providers and other smaller healthcare operations–paying for referrals is not a smart or legal idea.

Anti-kickback statutes were enacted to both protect patients from exploitation as well as to protect the integrity of the physicians to whom it applies. While most doctors have a tendency to have both the morality and integrity to follow these laws, one bad apple may spell doom for your healthcare venture. In the event that you find yourself on the wrong side of litigation in this type of matter, contact us immediately so we can walk you through a solution to this legal issue. 

The Stark Law, which is also called the Physician Self-Referral Law, is another similar statute that can find physicians and healthcare investors in hot water. Physicians are not allowed to refer patients to “designated health services” whose services are payable to Medicare or Medicaid if they have a financial or familial relationship with the business.

“Designated health services” cover a wide variety of different types of healthcare services, like clinical lab services, radiation therapy, home health services, and others.

 

For a concrete example of this, imagine that a doctor decides to refer a patient to a lab center for blood testing that just happened to be owned by his cousin. The patient, a Medicare recipient, may not even need these services to begin with, but because of financial incentives to both businesses, will be referred anyway. This is a crime in the healthcare world, not only to prevent the exploitation of patients but also to protect the integrity of these businesses.

If you’re unsure whether you’ve abided by these laws or have other questions related to healthcare fraud, contact our office today to set up your free introduction to one of our talented attorneys.