Stark Law

One of the most important federal healthcare fraud statutes is Stark Law, which prevents physicians from referring patients for designated health services covered by Medicare to healthcare specialists with whom the physician has a financial relationship. If you believe your physician is referring you to other healthcare providers with whom he or she has a financial relationship, contact an experienced qui tam attorney at the Brod Law Firm today to report the Stark Law violation and learn how our attorneys can help with your whistleblower case.

After the federal False Claims Act (FCA) was enacted in 1986, California enacted its own version of the Act called the California False Claims Act (CFCA). Modeled after the FCA, the CFCA is very similar to the FCA with the exception of a few minor differences.

The purpose of the CFCA was to create a cause of action against individuals and companies that knowingly submit false or fraudulent claims for payment, misappropriate public property, or avoid paying what it owes to the state of California or to local governments within the state. Violation of the CFCA is a civil offense and can result in fines of up to three times the actual harm to the state, plus a fine of $5,500 to $11,000 for each violation of the CFCA.

Under the CFCA’s qui tam provision, a whistleblower is permitted to file a claim under the Act. A whistleblower is an individual who informs on another individual or organization engaged in illegal conduct. Once a whistleblower files his or her lawsuit, which is kept under seal, the Attorney General or other prosecuting attorney may conduct its own investigation into the claim and may choose to intervene in the whistleblower’s lawsuit. If the Attorney General or local prosecuting attorney successfully prosecutes the case, the whistleblower may receive a portion of the reward, up to 33% in some cases. Since whistleblowing cases are quite complex, it is advisable to contact an attorney to assist you in filing your whistleblower claim.

Stark Law prevents physicians from referring patients covered under Medicare to certain healthcare specialists with whom the physician has a financial relationship. “Financial relationship” is defined broadly by the federal government and includes any direct or indirect ownership or investment interest by the physician or the physician’s immediate family member. Examples of immediate family members include the following:

• Husband or wife
• Birth or adoptive parent
• Child
• Sibling
• Stepparent, stepchild, stepbrother, or stepsister
• Father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law
• Grandparent or grandchild
• Spouse of a grandparent or grandchild

It is also important to note that Stark Law only applies to physicians referring patients for designated health services paid for by Medicare. Designated health services include the following:

• Clinical laboratory services
• Physical therapy, occupational therapy and speech-language pathology services
• Radiology and other imaging services
• Radiation therapy services and supplies
• Durable medical equipment (DMEs)
• Parenteral and enteral nutrients, equipment and supplies
• Prosthetics, orthotics, devices and supplies
• Home health services
• Outpatient prescription drugs
• Inpatient and outpatient hospital services

Generally speaking, Stark Law is interpreted broadly, so if you notice any actions by your healthcare provider that may be in violation of Stark Law, contact an experienced qui tam attorney immediately so he or she can review your case and help you decide the best way to proceed.

One final thing to note is that there are a number of exceptions to Stark Law that may allow a physician to refer a patient for a designated health service covered by Medicare to a healthcare specialist with whom the physician has a financial relationship. Exceptions to Stark Law include the following:

• Rental of office space or equipment
• Physician recruitment
• Personal service and fair market value (FMV) exceptions
• Isolated transactions
• Bona-fide employment

Although Stark Law is not a criminal statute, monetary penalties for violations of Stark Law can be severe. If you believe your healthcare provider is acting in violation of Stark Law, contact a qui tam attorney immediately to get help reporting your claim.

Now that you are aware of the function and purpose of Stark Law, you may be able to detect violations to Stark Law from your physician or healthcare provider. If you believe your physician is acting in violation of Stark Law, contact one of the experienced qui tam lawyers at the Brod Law Firm today so we can get started on your whistleblower claim. Contact us online or at (800) 427-7020 to schedule your confidential consultation and find out how we can help.