The Blurring Line Between The Anti-Kickback Statute And Stark Law
- Continued confusion between these laws
- Vast majority of enforcement actions involve these laws
- Stark is related to, but not the same as the Anti-Kickback Statute
- Violators of both laws may be subject to DOJ prosecution
- Suggestions for Compliance Offices
Struggling to understand the difference between the Anti-Kickback Statute (AKS) and Stark Laws? You are not alone. These terms are frequently misused, with even seasoned professionals mixing up the Anti-Kickback Statute and Stark Law – an understandable mistake, given that both focus on physician arrangements that corrupt medical decision-making.
This article will ensure you never make that mistake, providing a comprehensive explanation of the differences between the AKS and Stark Law.
Anti-Kickback vs. Stark Law: A Basic Overview
The primary difference is simple: the AKS covers referrals for all services from anyone, whereas the Stark Law is for referrals from physicians only and covers a set list of “Designated Health Services” (DHS). One is a criminal statute, and the other civil, each with different rules. However, the line between time between them over time has become blurred and it is important to understand how each works before we can fully appreciate differences.
What is the Anti-Kickback Statute?
Anti-Kickback Statute (AKS) is a criminal statute, dating back to the 1970s, that prohibits the exchange (or offer to exchange), of anything of value, to induce (or reward) the referral of business reimbursable by federal health care programs. Penalties for violating the AKS include fines of up to $25,000, up to five years in jail, and exclusion from Medicare and Medicaid care program business. Investigation has been assigned to the HHS OIG with enforcement actions by the DOJ. In fact, the AKS accounts for the great majority of DOJ enforcement actions in healthcare.
Examples of Anti-Kickback Violations
There are a wide variety of ways organizations and individuals violate the AKS; a single case can feature multiple different forms of kickbacks. For example, a recent case found one healthcare company had:
- Paid kickbacks to induce a competitor to refer patients to its pharmacy for dialysis patients. The company agreed to purchase dialysis products from the organization in exchange for these referrals.
- Paid improper renumerations via “management fees” to induce referrals to its clinic.
- Offered a large nephrology practice control staffing decisions at any new dialysis center that opened nearby – in exchange for referrals.
The result? The company was fined over $34 million, along with a major public shaming. This captures not just the broad ways kickbacks can be constructed, but also the severity of the risk involved in offering them up.
What is the Stark Law?
Stark Laws (physician self-referral laws) are federal civil laws that prohibit physician self-referral, specifically a referral by a physician to an entity providing “designated health services” (DHS) where the physician (or his/her immediate family member) has a financial relationship.
A simple example would be a physician entering into a contract that required them to refer their outpatients procedures to a specific provider. This would create a financial relationship between the physician and provider, which would make each referral a Stark Law violation.
How is Stark Law Enforced?
Violations are non-criminal. Penalties for violations of Stark Law include (a) denial of payment for money received by physicians and facilities, (b) payment of civil penalties of up to $15,000 for each service provided in violation of the law, (c) three times the amount of improper payment the entity received from the Medicare program, and/or (d) exclusion from the Medicare/Medicaid programs.
Although it is the primary agency responsible for enforcing the Stark Law, CMS has resulted in little government-initiated enforcement litigation. Instead, Whistleblowers (qui tam relators) have been the primary drivers of Stark enforcement actions through the DOJ.
There is another factor that creates confusion around these topics. Over time the Stark Laws have been amended to add additional regulations and regulations have been added to bring it closer to the AKS. The major driver of this is qui time relators who file under the False Claims Act, leading DOJ to investigate and prosecute violations of the Stark Law if such violations are in conjunction with violations of the Anti-Kickback Statute or the False Claims Act. The result has been for the Stark Law evolving from its initial intent and moved towards the AKS in appearance.
How to Approach the AKS and Stark Law
So, what should compliance officers do to navigate these two laws? The consequences of violating either AKS or Stark are serious, but there are steps to take to mitigate the risks, including:
- Develop and implement policies and procedures: These will not only create clear guidance to avoid any grey areas or risks, but they will also help to limit liability for your organization in the event that individual actors violate the laws.
- Monitor referrals: Ensure those responsible for arrangements with potential referral sources engage in ongoing monitoring to verify that they comply with written guidance. Clear documentation will be beneficial here.
- Conduct independent reviews: Engage experts to verify and monitor compliance, as well as validate that it has addressed the risks.
Conclusion
The Anti-Kickback Statute and Stark Law do not just present compliance issues – they are ethical imperatives. Every healthcare organization should have a clear understanding of both laws and take active steps to ensure they remain compliant – for the benefit of their patients, their reputation, and their organization.
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