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Anti-kickback crackdown turns up the heat on hospitals, health systems & doctors

The year 2024 is on track to see ever increasing penalties and stress on providers in a stepped-up enforcement of the Stark Law, formally known as the (42 U.S.C. §1395nn).

The 1989 federal act prohibits physicians from referring patients to receive “designated health services� payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies.

The goal, of course, is to  over physician self-dealing.

Healthcare providers who believe they may have violated the Stark Law  through a self-referral disclosure protocol (SRDP).

 designed to relieve Stark administrative burdens. Then, in early 2023, the Centers for Medicare & Medicaid Services again revised the protocol in .

The added Stark Law enforcement has resulted in self disclosures rising five fold in just two years

As a result, from 2021 to 2023,  � a 552% increase.

Perhaps one motivating factor is the burgeoning size of Stark settlements. For example, late last year, Community Health Network, Inc., of Indianapolis,  to resolve alleged Stark violations –�.

The settlement sprang from U.S. Department of Justice charges that senior management conspired to hire physicians from private practices at as much as double their salaries for the purpose of capturing “downstream referrals.â€� A whistleblower former executive reported the scheme in 2014 under the False Claims Act’s (FCA) qui tamÌý±è°ù´Ç±¹¾±²õ¾±´Ç²Ô²õ.

In another qui tam case, regional hospital operator Covenant Healthcare Systems and two of its physicians agreed to  in a suit brought by a former physician-executive for improper financial relationships between Covenant and its doctors.

More typical is  against a Houston neurologist for allegations of Medicare and Medicaid billing for medically unnecessary services and for referring patients to his own diagnostic centers.

Opponents say ramped-up Stark Law enforcement unjustly pressures docs

However, critics say that the widened Stark enforcement net is not only catching more offenders but is simultaneously squeezing physicians unfairly.

Ramped-up FCA and Stark enforcement is throwing doctors into a vise between patients and corporately owned and managed hospitals, health systems and medical practices, argues , a high-profile author and frequent public speaker on healthcare policy and workplace safety.

As private equity firms and business-focused management teams increasingly take control over American healthcare, doctors complain that pressure to increase provider productivity and profitability is approaching intolerable levels. Patient care subsequently suffers.

Duke expert: Business-minded boards prod physicians toward risking violations

Management boards typically function without physician members and defend their earnings-focused decisions  adjunct assistant professor at Duke University School of Medicine. While acceptable outside of healthcare, such conduct tends to draw doctors into risking FCA/Stark violations, sometimes unknowingly as guidelines and regulations grow.

Dr. Severance points to research finding that primary care physicians need  just to follow nationally recommended guidelines for preventive care while also seeing patients.

“[I]f there are no practicing physicians on board, my legal sources tell me that it’s much easier to avoid federal oversight and federal inquiry, especially if presented as ‘common business practice,’…â€� Dr. Severance told Becker’s ASC Review.

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