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Stark and Anti-Kickback

Both the Anti-Kickback and Stark Laws are intended to help ensure that medical decision-making is not compromised by improper financial incentives. These laws ensure healthcare providers and organizations base medical decisions on the best interest of the patient – not the best interest of their own wallet.

If you share knowledge and proof that a hospital, drug company, or healthcare provider may be getting kickbacks, you may be entitled to a financial reward under the False Claims Act. Coming forward with information about ongoing healthcare fraud schemes involving the Stark or Anti-Kickback Laws could entitle you to a financial reward. Call our firm to connect with a member of our team.

What is the Anti-Kickback Statute?

The Anti-Kickback Statute makes it illegal for healthcare providers to accept bribes, money, or gifts “knowingly and willfully” in return for Medicare, Medicaid, or other federal healthcare program business. The remuneration anti-kickback statute prevents healthcare providers from offering incentives for others to refer patients to them. The intent of the anti-kickback statute is to prevent medically unnecessary, poor quality, or harmful services being administered to patients.

What is the Stark Law?

The Stark Law prohibits physicians from referring patients for certain health services – paid for by Medicare – to anyone with whom they have a financial relationship. Stark Law is intended to protect the integrity of patient referrals and ensure that recommendations are made with patients in mind, as opposed to profits.

How do Kickbacks Violate Stark Law?

Kickbacks incentivize healthcare providers to refer patients to facilities that they have financial interest in for services which are billable to Medicaid and Medicare. When a healthcare provider is more interested in the benefit of a kickback at an affiliated facility, they may recommend and order services that a patient does not actually need or which would harm the patient in order to maximize their affiliate’s reimbursement from government healthcare programs.

Examples of Anti-Kickback and Stark Law Violations:

Off-Label Marketing

Pharmaceuticals and certain medical devices must be approved by the FDA before they can be marketed or sold to the public. Medicare and Medicaid require that reimbursement for pharmaceuticals and medical devices is only available when those pharmaceuticals or devices are used in the manner approved by the FDA. Companies that market and sell pharmaceuticals or devices, however, often unlawfully promote the use of their products for uses not approved by the FDA (called “off-label” uses) to increase profits. This off-label marketing leads to the submission of improper claims to Medicare and Medicaid.

The Department of Justice has been particularly aggressive about investigating Stark and Anti-Kickback law schemes and some of the largest qui tam cases ever – including some cases that have settled for more than $1 billion – arose out of such off-label marketing schemes.

If you are aware of old, new, or evolving fraud schemes involving off-label marketing, the Department of Justice may be very interested in learning more about the information you have. You may also be entitled to a financial reward. Tell us about the information you have. We will provide you a free consultation.

Pharma Speaker Programs

All too often, pharma and medical device companies are providing some kind of unlawful financial incentives to healthcare providers while they are also unlawfully marketing their drugs or devices “off-label.” These fraud schemes seem to go hand-in-hand.

A common kickback scheme is where a pharma or device company unlawfully pays physicians thousands of dollars to participate in a sham speaker program whereby the physician is provided expensive meals and alcohol with the expectation that the physicians will write more prescriptions for the company’s drugs than the physicians normally would in the absence of such incentives.

This has been one of the most aggressive areas of False Claims Act enforcement for the Department of Justice. In almost every case, DOJ was “put onto the fraud” by individuals who worked inside the company, often sales representatives who marketed the drugs to healthcare providers.

One pharma company paid over $95 MILLION for violating the False Claims Act by marketing one of its drugs off-label and by paying physicians in the form of money, speaker program fees, travel, and food to induce them to write prescriptions for the drugs. The three former employees of the pharmaceutical company who reported the fraud scheme to the Department of Justice received more than $17 MILLION.

In another case, a pharma company paid bribes and kickbacks to physicians to write prescriptions for a powerful opioid. The pharma company admitted that it set up a sham speaker program to funnel the payments to physicians. It paid $225 MILLION dollars. Several individuals reported this sham speaker program to the Department of Justice and were entitled to a share of the $225 MILLION recovery.

In some cases, a physician who prescribes unnecessary medications or excessive amounts thereof may eventually refer their patients to an addiction treatment center that they share a financial relationship with, with no intention of getting the patient help with their new addiction.

Additional Healthcare Fraud Schemes

Another pharmaceutical company paid $350 MILLION for:

  • Inducing clinics and physicians with lavish dinners, drinks, entertainment and travel, medical equipment and supplies
  • Unwarranted payments for purported speaking engagements and bogus case studies
  • Cash, credits, and rebates

Numerous individuals reported this unlawful kickback scheme to the Department of Justice and were entitled to a reward.

Anti-Kickback & Stark Law FAQ’s

What is the difference between the Stark Law and Anti-Kickback Statute?

The federal Anti-Kickback Statute prohibits those who can influence healthcare decisions from accepting compensation, gifts, or favors in exchange for services that are reimbursable through Medicare or Medicaid.

On the other hand, the Stark Law prohibits physicians from referring patients to, and accepting referrals from, entities that they or an immediate family member have a financial relationship with.

Does the Stark Law apply to physicians assistants?

No. The Stark Law applies only to physicians, chiropractors, and dentists and does not apply to midlevel providers, such as physician assistants.

Can physicians be prosecuted under anti-kickback and stark laws?

The Anti-Kickback Statute is a federal criminal statute, meaning violators can be prosecuted. Those convicted may face fines, jail time, and exclusion from federal health care programs.

The Stark Law is federal civil law. While Stark Law penalties exceed those imposed by anti-kickback laws, they would be non-criminal charges.

Does Stark Law apply to hospitals?

It depends. Stark Law prohibits a physician from referring patients to entities that they share a financial relationship, including hospitals, psychiatric hospitals, and rural primary care hospitals. Exceptions apply when referring patients for services which are not reimbursable under Medicare and Medicaid.

What is the False Claims Act?

The False Claims Act was originally enacted in 1863 to prevent defense contractor fraud during the American Civil War. This law makes any person who knowingly submits false claims to the government liable for three times the government’s damages, plus a penalty that is linked to inflation.

This federal statute allows individuals who have insider information about fraud taking place to file a qui tam lawsuit on the government’s behalf and entitles whistleblowers to a portion of the government’s recovered funds in a successful case.

Hiring a Qui Tam Lawyer

The benefits of hiring a qui tam attorney after witnessing a violation of Stark and Anti-Kickback regulations cannot be understated. Individuals who have information about such violations can become whistleblowers on the government’s behalf with the help of a lawyer. The False Claims Act requires whistleblowers to retain representation before filing a qui tam case.

These cases tend to be complex, and you will only be awarded compensation for your efforts if your claim is successful, so working with the right legal counsel is crucial. Specifically, the False Claims Act entitles you to 15-30 percent of the government’s total financial recovery after a Stark or Anti-Kickback Law violation.

Our Stark Law attorneys can help with:

  • Evaluating your evidence
  • Bringing your claim under the correct whistleblower programs
  • Encouraging the government to get involved with your case
  • Protecting your rights and advocating your position in court
  • Protecting you from retaliation if your employer attempts to terminate or demote you

Ask an Attorney about Stark and Anti-Kickback Laws

If you are aware of old, new, or evolving fraud schemes involving sham speaker programs or other kickback schemes, consider reporting the information to the Department of Justice. You may also be entitled to a financial reward. Call today to schedule a free consultation regarding Stark and Anti-Kickback Laws.

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