Warning! Stark Violation Suits on the Rise

It is likely that hospitals will start to see more False Claims suits related to physician compensation.

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More cases are expected under the False Claims Act alleging Stark violations inside healthcare facilities.

Why the likely rise in Stark violation allegations?

Partly because of two major recent cases that showed potential whistleblowers how lucrative these cases can be for the whistleblower. The cases involved Tuomey Healthcare System and Halifax Health.

In the Tuomey case, Tuomey settled with the government for $72.4 million. The whistleblower was paid $18.1 million for bringing forth the allegations that Tuomey paid doctors in ways that rewarded them for referring patients to the hospital.

In the Halifax case, Halifax settled with the government for $85 million, despite not admitting any wrong doing.  The Halifax whistleblower received $20.8 million for alleging illegal compensation of physicians.

Another reason for the rise in Stark cases brought under the False Claims Act is due to a change in the federal law that occurred in 2009.

The 2009 Fraud Enforcement and Recovery Act tweaked the False Claims Act and further reinforced that the False Claims Act was an avenue to bring Stark violations to court.

The latest large settlements have all alleged that hospitals paid physicians for the volume or value of their referrals. The hospitals allegedly paid more than fair market value.

We help review our clients’ contracts to make sure they do not violate any federal or state laws or regulations.

Occasionally, overpaying physicians can be legal when certain services are needed.

In our next blog post, we will keep you informed of related issues.  To get this important information delivered directly to your mail box, click here to Subscribe.

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P.S. If you or your patients are interested in consumer healthcare issues, check out myhealthspin.com.

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