Whistleblower Lawsuit Unsealed Alleging Stark Law Violations

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On April 19th, 2013 an Eastern District of Virginia court case was unsealed that alleged violations of the False Claims Act (“FCA”), Anti-Kickback Statute (“AKS”), and the Stark Law. In particular the Relator, or whistleblower, alleged that Bon Secours Health System and its hospital operated concierge program violated these laws. The Relator was an employee who had worked in this concierge program.  The program and the employees servicing the program performed certain work that previously had been done by physicians’ offices. For example the hospitals concierge program would schedule patients, obtain insurance pre-authorization, and collect copayments and deductibles.

Although the court granted the defendant's motion to dismiss the Relators complaint, the court did grant leave so the Relator could amend the complaint. This occurred because the Relator must allege with reliability that an actual false claim was submitted to the government. Nevertheless this is important because concierge services for referring physicians can be problematic under the AKS and the Stark Law. If these additional services do not serve as a benefit for the care provided by hospitals and only serve as a benefit for referring physicians and such programs may create risk for hospitals that provide such services to physicians.

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