When Stark Law and Anti-Kickback Violations Trigger FCA Liability

Stark Law and Anti-Kickback Statute violations can lead to False Claims Act (FCA) liability when improper financial relationships or referral arrangements result in the submission of false claims to federal healthcare programs. While not every regulatory violation automatically triggers FCA liability, these laws frequently intersect during federal healthcare fraud investigations.

To learn how these laws may apply to your specific situation, contact the Law Offices of Peter Katz to talk to our fraud defense attorney in New York.

What Are The Stark Law and The Anti-Kickback Statute, and How Do They Differ?

The Stark Law, 42 U.S.C. § 1395nn, generally prohibits physicians from referring Medicare patients for certain designated health services to entities with which they or an immediate family member have a financial relationship unless there’s an applicable statutory or regulatory exception. By contrast, under the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), it’s illegal to knowingly and willfully pay, offer, receive, or solicit remuneration, including any rebate, bribe, or kickback, to induce referrals involving federal healthcare programs.

For instance, a physician who owns an interest in an imaging center may raise Stark Law concerns if patients are referred there without satisfying an applicable exception. A consulting agreement that pays excessive compensation in exchange for patient referrals may instead trigger scrutiny under the Anti-Kickback Statute. If you believe you’re being investigated for healthcare fraud, our fraud defense lawyer can evaluate which statute investigators believe applies and whether an exception, safe harbor, or other defense is available to you.

Anti-Kickback Statute and Stark Law Violations Can Result in False Claims Act Liability

The FCA authorizes the government to pursue civil liability against anyone who knowingly submits or causes the submission of fraudulent or false claims for payment to the federal government. For example, investigators may allege that claims submitted to Medicare were the result of prohibited referral arrangements or unlawful kickbacks. If the government believes those claims should never have been submitted because of the underlying violation, it may pursue FCA liability in addition to other enforcement actions.

Financial Arrangements That Commonly Trigger Anti-Kickback Statute and Stark Law Investigations in New York

Federal investigators frequently examine financial relationships between healthcare providers to determine whether they comply with federal law. These financial relationships typically include:

• Physician compensation agreements
• Medical director contracts
• Consulting arrangements
• Office space leases
• Equipment leases
• Marketing agreements
• Vendor relationships
• Referral compensation arrangements

For example, a physician group in Manhattan leases office space from a diagnostic imaging provider. Even if the parties believe the arrangement is legitimate, investigators may examine whether the lease satisfies applicable Stark Law exceptions or Anti-Kickback Statute safe harbors. Our New York fraud defense attorney can review contracts, compensation terms, and supporting documentation to determine whether the arrangement complies with federal healthcare laws before investigators draw their conclusions.

The Consequences of Violating The Stark Law and Anti-Kickback Statute Can Be Costly

The consequences depend on the specific facts and the laws allegedly violated. Stark Law violations may result in denied Medicare payments, refund obligations, and possible exclusion from federal healthcare programs. Civil monetary penalties also apply, starting at $15,000 per prohibited service and $100,000 for certain circumvention schemes under the statute, with both amounts adjusted upward annually for inflation. The current inflation-adjusted figures are roughly double the statutory amounts, meaning the exposure from even a modest volume of prohibited claims can reach into the millions.

Anti-Kickback Statute violations expose defendants to criminal fines of up to $100,000 per violation, up to 10 years’ imprisonment, or both. Depending on the circumstances, the same conduct may also give rise to liability under the FCA, which adds treble damages and its own per-claim penalties on top of everything above.

Seek Legal Advice From Our Seasoned Fraud Defense Lawyer in New York

Federal investigations involving physician referrals, compensation arrangements, and Medicare billing can have significant legal and financial consequences. Find out more about your case by completing our contact form or calling 609-849-3179 for your confidential case assessment.