Fraud and Abuse Laws

Overview

BakerHostetler regularly counsels clients on a variety of fraud and abuse matters involving the federal Anti-Kickback Statute, the federal physician self-referral law known as the Stark Law and the Civil Monetary Penalties Law. We also assist clients with compliance with state fraud and abuse laws.

Our Approach

Healthcare providers regularly engage in business arrangements that may implicate the fraud and abuse laws. BakerHostetler has experience in the breadth of fraud and abuse matters, from analyzing a potential new business arrangement to reviewing ongoing compliance and assisting clients with handling a self-disclosure or government investigation. We understand that our clients are facing increased pressures from various enforcement agencies and we help them navigate the increasingly regulated healthcare environment.

Our healthcare attorneys have broad experience with the multitude of transactions and arrangements in the healthcare industry, which gives us a unique perspective in helping clients structure arrangements in compliance with the Anti-Kickback and Stark laws, including joint venture arrangements, service contracts, equipment rental and lease arrangements, medical directorships and a variety of other arrangements. Our clients have included academic medical centers, hospitals and hospital systems, physician groups, laboratories, imaging centers and post-acute providers, such as home health agencies and DME suppliers. We also have significant experience in assisting clients in evaluation of existing relationships and with government investigations, including responding to civil investigative demands and administrative subpoenas issued by the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) and U.S. Department of Justice (DOJ). If a client discovers an arrangement that may be in violation of the Anti-Kickback or Stark laws, our team can assist with taking corrective action through a self-disclosure and settlement negotiation.

Stark Law compliance is an important aspect of almost any arrangement involving physicians. Recent changes to the Stark Law, including changes to the whole hospital exception, disclosure requirements for certain imaging services and under arrangements issues, each require careful consideration from providers. Our team knows the complexities of the law and its exceptions, and we apply this extensive knowledge when assisting our clients with internal investigations and potential self-disclosure actions. Providers have multiple targets on their backs as enforcement actions for Stark Law violations may be initiated by the HHS Centers for Medicare and Medicaid Services (CMS), the OIG, the DOJ and whistleblowers in False Claims Act litigation. We understand these pressures and regularly counsel our clients who are facing potential enforcement actions.

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Fraud and Abuse Law News

Two For Me; Many Times More for the Government in the Largest Whistleblower Award Against a Community Hospital (10/3/13)
A U.S. district judge in South Carolina approved the government's request for a civil penalty award and ordered Tuomey Healthcare System, Inc. (Tuomey) to pay more than $237 million in damages and fines in a whistleblower case that accused Tuomey of paying doctors pursuant to compensation arrangements that violated the Stark Law.

Hospital Ordered to Produce Privileged Documents Under the Crime-Fraud Exception (5/30/13)
A magistrate judge in the U.S. District Court for the Middle District of Florida recently ordered a hospital defendant in a False Claims Act (FCA) case to turn over two prime documents to the U.S. Department of Justice and the whistleblower that would seem to fall within the traditional confines of the attorney-client privilege.

Groundhog Day for Tuomey: Jury Finds Hospital Violated Stark Law and False Claims Act (5/16/13)
On May 8, 2013, a jury in the Columbia Division of the U.S. District Court for the District of South Carolina returned a verdict finding that Tuomey Healthcare Systems, Inc. (Tuomey) violated the Stark Law and the federal False Claims Act by submitting 21,730 claims to Medicare tainted by improper relationships with eighteen physicians. The jury verdict is the result of a remand ordered on procedural grounds by the Fourth Circuit Court of Appeals in March 2012.

OIG and CMS Issue Proposals to Extend Safe Harbor and Exception for EHR Donations (4/18/13)
In the April 10 Federal Register, two agencies within the U.S. Department of Health and Human Services published proposed rules that many healthcare providers have been anxiously awaiting affecting donations of electronic health record (EHR) items and services. CMS and OIG each issued a proposed rule that would extend to at least December 31, 2016, the sunset provisions of the Stark exception and anti-kickback safe harbor for EHR donations. The exception and safe harbor currently mirror each other and are due to expire December 31, after which date many existing EHR subsidy agreements between healthcare providers and physicians no longer would be protected.

OIG Issues Special Fraud Alert for Physician-Owned Entities (4/4/13)
The U.S. Department of Health and Human Services Office of Inspector General (OIG) recently issued a Special Fraud Alert expressing concern that physician-owned entities "that derive revenue from selling, or arranging for the sale of, implantable medical devices ordered by their physician-owners for use in procedures the physician-owners perform on their own patients at hospitals or ambulatory surgical centers (ASC)" raise significant fraud and abuse and patient safety concerns.

Stark Exception for ESRD Not Recognized In Florida (2/7/13)
On January 10, 2013, the U.S. Court of Appeals for the Eleventh Circuit ruled in Fresenius Medical Care Holdings, Inc. v. Tucker, that an arrangement can violate Section 456.053 of the Florida Statutes, also known as Florida's "Patient Self-Referral Act of 1992" (Florida Act) even though the arrangement complies with federal Stark Law.

Select Experience

  • Provided consultation related to development of new compensation methodology for faculty physicians at large academic medical center to assure compliance with Stark and Anti-Kickback laws.
  • Provided consultation related to organizational alternatives of healthcare provider joint ventures involving physician ownership to assure compliance with Stark and Anti-Kickback laws.
  • Provided consultation on permissible allocation of ancillary services revenue under the Stark Law to members of a large multispecialty physician group practice affiliated with a large health system.
  • Conducted review of all physician contracts for hospital systems for compliance with the Stark and Anti-Kickback laws, assisted in reformation of arrangements to facilitate compliance and analysis of self-disclosure requirements.
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Experience

  • Provided consultation related to development of new compensation methodology for faculty physicians at large academic medical center to assure compliance with Stark and Anti-Kickback laws.
  • Provided consultation related to organizational alternatives of healthcare provider joint ventures involving physician ownership to assure compliance with Stark and Anti-Kickback laws.
  • Provided consultation on permissible allocation of ancillary services revenue under the Stark Law to members of a large multispecialty physician group practice affiliated with a large health system.
  • Conducted review of all physician contracts for hospital systems for compliance with the Stark and Anti-Kickback laws, assisted in reformation of arrangements to facilitate compliance and analysis of self-disclosure requirements.

Recognition

  • Recognized as one of the top law firms for client service, we were named to the 2018 BTI Client Service 30 for the fourth consecutive year.

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Health Law Update
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Health Law Update
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