Module 1, Topic 2
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Day 2: Stark Law

Petria September 3, 2020
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Stark Law

Stark Law is a set of United States federal laws that prohibit physician self-referral, specifically a referral by a physician of a Medicare or Medicaid patient to an entity fo  r the provision of designated health services (“DHS”) if the physician (or an immediate family member) has a financial relationship with that entity.

It is named for United States Congressman Pete Stark (D-CA) who sponsored the initial bill. In 1988, Stark introduced an “Ethics in Patient Referrals Act” bill concerning physician self-referrals.

“… If a physician (or an immediate family member of such physician) has a financial relationship with an entity …, then the physician may not make a referral to the entity for the furnishing of designated health services for which payment otherwise may be made” under Medicare and to some extent Medicaid.

Stark: Examples of Exceptions

  • Personal Services Arrangements
  • Employment
  • Non-Monetary Compensation up to $355
  • Space/Equipment Leases

Stark: Penalties

  • Strict liability statute –No intent required
  • Not criminal
  • Civil sanctions ($15,000/claim)
  • Exclusion from Federal programs
    • Medicare
    • Medicaid
    • CHAMPUS
  • Recoupment of payments
  • Bootstrap of False Claims Act violation
    • Treble damages
    • $5,500 -$11,000/claim

10 largest False Claims, Stark Law and Anti-Kickback settlements of 2014

Baton Rouge, La.-based Amedisys, one of the country’s largest providers of home health services, and its affiliates agreed to pay $150 million to resolve allegations brought under the False Claims Act, Stark Law and the Anti-Kickback Statute. The lawsuit filed against Amedisys was brought under the qui tam, or whistle-blower, provision of the False Claims Act by former employees of the company. The lawsuit alleged Amedisys submitted improper claims to Medicare for reimbursement from 2008 to 2010 for therapy and nursing services that were medically unnecessary or provided to patients who were not homebound. The lawsuit also alleged the company engaged in improper financial relationships with referring physicians.

Stark Law — Stay Tuned

HHS Proposes Stark Law and Anti-Kickback Statute Reforms to Support Value-Based and Coordinated Care
As of October 2019

Anti-Kickback Statute (AKS)

The Anti-Kickback Statute covers a broader range of activity than the Stark Law, and extends to all medical providers in a position to arrange or recommend medical services.

It also requires a showing of an “intent to induce referrals.” The criminal provisions of the Anti-Kickback Statute are violated where something of value is “knowingly and willfully” provided with a purpose to induce referrals.

Texas Home Health Prosecutions in Calendar Year 2018

 

Anti-Kickback Statute — Penalties

Penalties for violating the Anti-Kickback Statute are steep. Although it is a criminal statute, it imposes both criminal and civil penalties for violations, both of which can have a profound impact on one’s personal and professional life. While penalties and repercussions will vary depending on the circumstances involved, violations may result in:

  • Criminal fines up to $25,000 per violation
  • Up to 5 years in federal prison for a single violation
  • Civil fines up to $50,000 plus three times the damages (treble damages) sustained by the government
  • Exclusion from federal health care programs
  • Loss of medical license

False Claims Act (FCA)

American federal law that imposes liability on persons and companies (typically federal contractors) who defraud governmental programs. It is the federal Government’s primary litigation tool in combating fraud against the Government.

 

United States Settles False Claims Act Cases Against Home Health Agency

 

1986 Changes

  • The elimination of the “government possession of information” bar against qui tam lawsuits;
  • The establishment of defendant liability for “deliberate ignorance” and “reckless disregard” of the truth;
  • Restoration of the “preponderance of the evidence” standard for all elements of the claim including damages;
  • Imposition of treble damages and civil fines of $5,000 to $10,000 per false claim;
  • Increased rewards for qui tam plaintiffs of between 15–30 percent of the funds recovered from the defendant;
  • Defendant payment of the successful plaintiff’s expenses and attorney’s fees, and;
  • Employment protection for whistleblowers including reinstatement with seniority status, special damages, and double back pay.

 

2009 changes

In 2009, the Fraud Enforcement and Recovery Act of 2009 (FERA) was signed into law. It includes the most significant amendments to the FCA since the 1986 amendments.  Such as,

  • Redefined “claim” under the FCA to mean
  • Increased protection for qui tam plaintiffs/relators beyond employees, to include contractors and agents
  • Also with this revision, the FCA now prohibits knowingly, submitting for payment or reimbursement a claim known to be false or fraudulent.

 

2010 changes

In 2010, the Patient Protection and Affordable Care Act (also referred to as the health reform bill or PPACA) was signed into law by President Barack Obama. The Affordable Care Act made further amendments to the False Claims Act, such as:

  • Changes to the Public Disclosure Bar
  • Original Source Requirement
  • Overpayments
  • Statutory Anti-Kickback Liability
  • The Department of Justice obtained more than $3 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30, 2019.
  • The government has recovered more than $62 billion under the False Claims Act between 1987 and 2019.
  • As of 2019, over 71 percent of all FCA actions were initiated by whistleblowers.
  • Whistleblowers filing under the Act stand to receive a portion (15-30 percent, depending on certain factors) of any recovered damages.

 

Civil Monetary Penalties Law

The Civil Monetary Penalties Law authorizes CMPs for a variety of health care fraud violations. Different amounts of penalties and assessments may be authorized based on the type of violation. CMPs also may include an assessment of up to three times the amount claimed for each item or service, or up to three times the amount of remuneration offered, paid, solicited, or received. Violations that may justify CMPs include:

  • Presenting a claim you know, or should know, is for an item or service not provided as claimed or that is false and fraudulent
  • Presenting a claim you know, or should know, is for an item or service for which Medicare will not pay
  • Violating the AKS

 

Whistleblowers

Whistleblower disclosures by can save lives as well as billions of taxpayer dollars. They play a critical role in keeping our Government honest, efficient, and accountable. Recognizing that whistleblowers root out waste, fraud, and abuse and protect public health and safety, Federal laws strongly encourage employees to disclose wrongdoing.

Federal laws also protect whistleblowers from retaliation. Pursuant to the Whistleblower Protection Enhancement Act of 2012, the Department of Health and Human Services, Office of Inspector General, established a Whistleblower Ombudsman in the OIG to educate Department employees about prohibitions on retaliation for whistleblowing, as well as employees’ rights and remedies if anyone retaliates against them for making a protected disclosure (i.e., “Whistleblowing”).

The name of the Ombudsman was changed to the “Whistleblower Protection Coordinator” under the Whistleblower Protection Coordination Act of 2018 to better reflect the roles and responsibilities of the position.