How are violations of the Anti-Self Referral Laws a Fraud on the Government?

Both federal and state laws prohibit health care providers who participate in government sponsored programs such as Medicare or Medicaid from having a financial interest in certain types of services provided to their patients.  These laws are sometimes called the “Anti-Self-Referral Laws.”  The most common of these laws is the federal Stark law.  The purpose of the Stark law was to respond to concerns that excessive use of some services is encouraged when physicians have a financial relationship with the entities to which they refer patients.  This may result in medically unnecessary services or therapies for the patients and unnecessary costs billed to the federal and state government health care programs.  Therefore, under the Stark law, a physician who refers patients for certain specified health care services or orders supplies or devices that are paid for by Medicare or Medicaid is prohibited from having investment interests and compensation arrangements with the entities to which patients are referred, including MRI and Ultrasound imaging centers, laboratories, equipment sellers, or physical and psycho-therapy clinics.  A doctor or his/her immediate family who has a financial interest in a business to which the doctor refers patients for care or services paid for by a government health care program could be violating the Stark Law and other federal or state Anti-Self-Referral laws. 

If the answer to any of the following questions is ‘yes,’ there may be an improper financial arrangement in violation of the Anti-Self-Referral laws.

• Has the physician been offered or paid a nominal capital contribution to the third party vendor?
• Has the physician been offered or given a larger share of the aggregate capital contributions made then the amount contributed to be an owner of the venture?
• Has the physician been offered or given a higher rate of return for little or no financial risk?
• Has the venture or business partner offered or offering to loan the doctor the money needed to make the capital contribution?
• Has the physician been asked or did she promise or guarantee to refer patients or order items or services from the venture?

While these types of improper financial arrangements can take many forms, the common theme is the doctor referring patients or ordering goods and the doctor profiting from these referrals.

Violations of the Anti-Self-Referral laws can also lead to violations of the False Claims Act.  Every provider of healthcare services to Medicare and Medicaid must certify to the government that the provider will abide by all laws governing the provision of healthcare to the program’s beneficiaries.  This certification specifically identifies compliance with the Stark law as a condition for getting paid by Medicare and Medicaid.  Therefore, a healthcare provider who bills the government for healthcare services in violation of the Stark law is making a false claim for payment from the government which may be a violation of the False Claims Act.

If you believe a physician has an improper financial arrangement with a vendor and is referring patients to that vendor, and you would like more information about how this may be the grounds for bringing a whistleblower lawsuit, the qui tam lawyers at Keller Grover LLP can help you.  The whistleblower lawyers at Keller Grover understand qui tam litigation, including the whistleblower protection provisions, and strive to achieve the best possible results for their clients.