Federal Government Pursuing Physicians for Stark Law Violations

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In April, a physician-owned Ohio cardiology clinic agreed to pay $1 million to settle violations of the False Claims Act stemming from an arrangement with two local hospitals.  As a precursor to this settlement, in 2011 Ohio Valley Medical Center and East Ohio Regional Hospital agreed to pay $3.8 million to settle allegations that it violated the Stark Law.  These allegations involved the same cardiology clinic.  In the 2011 release by the Department of Justice, it was mentioned that “[p]hase two of the case involves pursuing the physicians involved and requiring that they return prohibited payments.”
Historically, the Federal government has only pursued hospitals in these types of arrangements involving the Stark Law because the hospital billed for and received reimbursement from the tainted referral.  However, the Stark Law also prohibits physicians who have a financial relationship with an entity from referring patients to that entity.  Each referral, unless an exception is met under the Stark Law, may be deemed by the government to be false and therefore a penalty may be required to be paid by the referring physician.  
Although most is still unknown regarding the cardiology clinic agreeing to pay $1 million, this settlement stands for the proposition that the Federal government may seek a financial penalty from physician groups in which egregious Stark Law violations have occurred. 

If you have any questions about this settlement, the Stark Law, or other healthcare issues, please feel free to contact Robert A. Wade at (574)-485-2002 or Alex T. Krouse at (574)-485-2003.