Stay Focused on Stark and Anti-kickback Regulations

Pensive WomanSince the expansion of new Health Insurance Portability and Accountability Act (HIPAA) regulations, which redefines who is considered a business associate by covered entities under the Health Information Technology for Economic and Clinical Health (HITECH) Act, the Anti-kickback Statute and Stark (physician self-referral) Laws haven’t been in the limelight as a compliance focus for many practices. Many practices have been more concerned with safely handling their patient’s protected health information (PHI). Although safeguarding PHI and keeping up with other compliance risks are serious concerns in your practice, it’s important to stay focused on the Anti-kickback statute and Stark law regulations, as well—because the government is focused on them.

For the month of July, alone, the U.S. Department of Health & Human Services’ (HHS) Office of Inspector General (OIG) listed on their website several criminal and civil enforcement actions for Stark and Anti-kickback violations. Among them are:

United States Intervenes in Infirmary Health System Inc. Lawsuit

On July 8, the U.S. Department of Justice (DOJ) said it was joining forces in a Mobile, Ala., whistleblower lawsuit. In violation of Stark Law and the Anti-kickback Statute, Infirmary Medical Clinics P.C. and its affiliates, IMC-Diagnostic and Medical Clinic P.C. and Diagnostic Physicians Group P.C., are alleged to have billed Medicare for services referred by Diagnostic Physicians Group physicians.

According to the DOJ press release, “The government’s intervention in this lawsuit illustrates its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius.”

Amgen Inc. Pays $15 Million

On July 11, Los Angeles biopharmaceutical company Amgen Inc. paid more than $15 million to the United States to resolve allegations violating the Medicare Anti-kickback Statute and the federal False Claims Act. Allegedly, Amgen Inc. provided physicians and physician groups with illegal financial incentives and marketing to prescribe Xgeva to cancer patients.

Cardiologist Serves Time for Taking Cash Patient Referral Kickbacks

On July 11, an East Orange, N.J., cardiologist, Shashi Agarwal, was sentenced to 30 months in jail for accepting cash kickbacks for referring patients for diagnostic testing at orange MRI. Orange MRI paid Agarwal, owner of the cardiologist practice, $100 cash for each Medicare or Medicaid patient he referred for MRI and $50 for each CT scan referral. Agarwal allegedly agreed to pay $101,750 in bribe money, as well. The total number of arrests related to this case is 15 individuals (including 12 doctors and nurse practitioners); 12 have pleaded guilty.

Scheme Involves $2.3 Million in Bribery and Kickbacks

On July 17, the DOJ made public a scheme involving executives of a Manhattan-based medical cost management company who were charged with accepting bribes and kickbacks of over $2.3 million from information technology vendors to secure business.

According to the DOJ press release, HHS-OIG Special Agent-in-Charge Thomas O’Donnell said, “This scheme was motivated by greed and it deprived its victim, a company in the health care field, of the honest labor of its employees. We will continue to aggressively investigate those who pay kickbacks and bribes to gain an advantage in the public and private health care sectors.”

Follow the Rules

Your best defense against fraud and abuse allegations is to know the regulations and follow them. In a nutshell, according to Christopher A. Parrella, J.D., CHC, CPC, CPCO, in Medical Practice Digest’s “Primer on the Anti-kickback Statute and Stark Law” (September 2011), the regulations are:

The Federal Anti-kickback Statute

“The anti-kickback statute (42 U.S.C. § 1320a-7b(b)(1-3)) prohibits the offer, solicitation, payment, or receipt of any remuneration, in cash or in kind, in return for, or to introduce, the referral of a patient for any service that is covered by a federal healthcare program (most notably, Medicare and Medicaid). Reward in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item reimbursed under a federal healthcare program is also prohibited conduct.”

Patient Referral Act Ethics

“Stark law (42 U.S.C. § 1395nn], effective for referrals made after Dec. 31, 1994, states that if a physician (or an immediate family member of such physician) has a ‘financial relationship’ with an entity, the physician may not make a referral to that entity for the furnishing of ‘designated health services’ for which payment is sought under Medicare or Medicaid. Nor may the entity present a claim or bill to any individual, third-party payer, or other entity for designated health services.”

The following services and items defined as “designated health services” (enumerated by CPT® codes):

  • Clinical laboratory services
  • Physical therapy services, speech-language pathology services
  • Occupational therapy services
  • Radiology or other diagnostic services, including MRI, CT scans, and ultrasound services
  • Radiation therapy services and supplies
  • Durable medical equipment and supplies
  • Parenteral and enteral nutrients, equipment and supplies
  • Prosthetics, orthotics, and prosthetic devices and supplies
  • Home health services
  • Outpatient prescription drugs
  • Inpatient and outpatient hospital services
  • Nuclear medicine services and supplies

To simplify the rules further, “Financial arrangements that compensate physicians for referrals encourage physicians to make decisions based on financial gain rather than patient needs,” fall under these regulations, according to Stuart F. Delery, acting assistant attorney general for the DOJ Civil Division, in the press release involving the Mobile, Ala., lawsuit.

The DOJ remains “committed to preventing illegal financial relationships that corrupt the integrity of our public health programs,” he said.


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One Response to “Stay Focused on Stark and Anti-kickback Regulations”

  1. S.D.T.Parrott says:

    Example: Representative from a supply / pharmaceutical company schedules appt to meet with a doctor to review success of a product that is already being used, to update the office about changes in the medication or supply use or coverage, or to bring a new product to the attention of the doctor(s) and provides lunch for the office durng the time scheduled to meet with that doctor; although that seems innocent, is that considered in any way a violation of Stark law?

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