California Healthcare System Settles Federal Claim for $15 Million Involving Alleged Violations of Stark Law
A California Healthcare provider has agreed to a $15,117,516 settlement to resolve conduct concerning violations of the Physician Self-Referral Law, commonly known as the Stark Law, and double-billing Medicare for certain services referred by physicians with whom the healthcare system had a financial relationship.
The healthcare provider self-disclosed these issues: (1) paid compensation under personal services arrangements that exceeded the fair market value of the services provided; (2) leased office space at below-market rates; and (3) paid reimbursements of physician-recruitment expenses that exceeded the actual recruitment expenses at issue. Additionally, several of the provider’s ambulatory surgical centers double-billed the Medicare program by submitting claims that included radiological services for which Medicare separately paid another entity that had performed those services
The Stark Law prohibits a healthcare provider from billing Medicare for certain services referred by physicians with whom the provider has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions. The law is intended to ensure that medical decision-making is not influenced by improper financial incentives and is instead based on the best interests of the patient.
Compliance Perspective
Allowing physicians with whom a healthcare provider has a financial relationship to be compensated in violation of the Stark Law and then double-billing Medicare for certain services referred by those same physicians or provided by another entity that Medicare also paid may be considered violation of the False Claims Act.
Discussion Points:
- Review policies and procedures regarding compensation of physicians to ensure that no compensation that violates the Stark Law is paid, and that claims submitted to Medicare do not represent any form of double-billing.
- Train staff involved with submission of claims to review documentation and to make sure that claims are not billed and reimbursed to another provider, thus constituting double-billing.
- Periodically audit compensation paid to physicians to ensure that it does not exceed the fair market value of the services provided as a way to obtain illegal physician referrals.
FRAUD MODULE 3 – MASTERING LEGAL IMPLICATIONS AND ANTITRUST LAWS
