What Is Stark Law And What Are The Penalties For Violating It?

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Posted: 26th July 2022 by
Lawyer Monthly
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Most healthcare professionals are aware of the Stark Law but may not know exactly what it is or the penalties for violating it. In this article, we will discuss what the Stark Law is, what constitutes a violation, and the penalties for breaking it. We hope this information will help you stay compliant with this important law.

The Stark Law, also known as the "Anti-Kickback Statute," is a federal law that prohibits any healthcare professional from referring patients to receive services from specific individuals or entities in return for illegal kickbacks. Violating the Stark Law can result in significant fines and even imprisonment.

If you're facing accusations of healthcare fraud, you need a healthcare fraud attorney who knows how to fight Stark Law cases. Stark Law is a complex set of regulations that can be difficult to navigate, but an experienced attorney will know how to build a strong defence and get the best possible outcome for your case. With so much at stake, it's important to have an advocate on your side who knows the ins and outs of Stark Law and can help you achieve the best possible outcome. Contact a healthcare fraud attorney today to discuss your case and get started on building a strong defence.

The federal government enacted the Medicare and Medicaid Patient and Program Protection Act (“Stark Law”) in 1989. The Stark Law seeks to prevent physicians from making referrals for certain health care services which are paid for by Medicare or Medicaid to an entity with which the physician or an immediate family member has a financial relationship unless an exception applies. 

The term “financial relationship” includes ownership interests, investment interests, compensation arrangements, and other relationships. In general, the Stark Law prohibits a physician from referring a patient for designated health services to immediate family members with a financial relationship; this is to ensure that physicians make referral decisions based on the best interests of their patients, rather than on their own financial interests. The law applies to a wide range of health care services, including laboratory tests, radiology services, and durable medical equipment.

A stark law violation occurs when a physician refers a patient to an entity with which the physician or immediate family member has a financial relationship unless an exception applies. The patient must be referred to a designated health service, and the referral must be made for medically necessary reasons. For example, if a doctor owns a laboratory and refers patients to that laboratory for blood tests, that would be considered a stark law violation. Other examples of stark law violations include referring patients to a clinic owned by the physician’s spouse or referring patients to a hospital in which the physician has an ownership interest. Violators of the Stark Law may be subject to civil penalties, including exclusion from Medicare and Medicaid.

The penalties for violating the Stark Law are significant. Civil monetary penalties of up to $100,000 per violation may be imposed, as well as exclusion from participation in the Medicare and Medicaid programs. In addition, persons who knowingly submit false claims for payment containing referrals prohibited by the Stark Law may be subject to criminal penalties under the False Claims Act.

​​Depending on the country, a stark violation may result in a prison sentence, a fine, or both. The specific penalties for a stark violation will vary depending on the severity of the offence and the jurisdiction in which it is prosecuted. However, because stark laws are designed to protect vulnerable populations, they typically carry harsher punishments than other types of laws. In addition, many jurisdictions have laws that allow for enhanced penalties if the offender has a prior record of stark violations. As a result, it is important to consult with an experienced attorney if you have been accused of violating a stark law.

The Office of Inspector General (OIG) for the Department of Health and Human Services is responsible for enforcing the Stark Law. The OIG enforces the Stark Law through investigations, audits, and reviews. The OIG also works with the Department of Justice to prosecute cases involving violations of the Stark Law. In addition to enforcing the Stark Law, the OIG also works to prevent fraud, waste, and abuse in the Medicare and Medicaid programs. The OIG may conduct audits and investigations of physicians and other health care providers to determine compliance with the Stark Law.

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