More Qui Tam Stark Enforcement of Hospital-Physician Arrangements

Compliance Today December 2016

Gary W. Herschman, a Member of the Firm in the Health Care and Life Sciences practice, in the firm’s Newark office, authored an article in Compliance Today, titled “More Qui Tam Stark Enforcement of Hospital-Physician Arrangements.”

Following is an excerpt (see below to download the full report in PDF format):

On July 28, 2016 the Department of Justice announced a $17 million qui tam settlement with Lexington Medical Center for allegations implicating the Stark Law, the Anti-Kickback Statute (AKS), and the False Claims Act (FCA). The lawsuit was brought by Dr. David Hammett, a neurologist formerly employed by Lexington Medical Center, and was later joined by the United States.

This FCA lawsuit and settlement highlight that hospitals must continue to be extremely vigilant and make substantial efforts to confirm that all of their arrangements with physicians comply with each of the technical requirements of an applicable Stark Law exception.

This case not only involved allegations of above fair market value (FMV) payments to physicians, including tiered compensation per worked relative value unit (wRVU), but also involved the hospital requiring employed physicians to make referrals to the hospital and its affiliates without (allegedly) complying with the conditions of the Stark Law’s provisions applicable to such “required referral” arrangements.

This article summarizes the allegations of this FCA lawsuit, outlines the requirements of the relevant Stark Law exceptions, and concludes with practical recommendations for hospital compliance officers and in-house counsel to avoid similar potential regulatory exposure.