Stark Law, AKS continue to be focus of False Claims Act Settlements

Providers should be vigilant about the truthfulness of the claims and statements that are being submitted for remuneration by the government.

It is no secret that the Stark Law and the Anti-Kickback Statute (AKS) are two major laws associated with fraud, waste, and abuse. Often, persons who violate these laws find themselves on the receiving end of a False Claims Act case and paying a significant sum of money to settle the allegations. The recent $21 million settlement by Akron General Health System (AGHS) highlights the importance of (1) being compliant with both the AKS and Stark Law, and (2) False Claims Act cases uncover improper financial arrangements which violate the AKS and Stark Law.

Before delving into the AGHS settlement, it is important for providers to appreciate what they attest to when a claim is submitted to Medicare, Medicaid, or another government program. For example, CMS Form 1500 includes the following express language:

SIGNATURE OF PHYSICIAN OR SUPPLIER
In submitting this claim for payment from federal funds, I certify that: 1) the information on this form is true, accurate and complete; 2) I have familiarized myself with all applicable laws, regulations, and program instructions, which are available from the Medicare contractor; 3) I have provided or will provide sufficient information required to allow the government to make an informed eligibility and payment decision; 4) this claim, whether submitted by me or my behalf by my designated billing company, complies with all applicable Medicare and/or Medicaid laws, regulations, and program instructions for payment including but not limited to the Federal anti-kickback statute and Physician Self-Referral law (commonly known as Stark law); 5) the services on this form were medically necessary and personally furnished by me or were furnished incident to my professional service by my employee under my direct supervision, except as otherwise expressly permitted by Medicare or TRICARE; 6) for each service rendered incident to my professional service, the identity (legal name and NPI, license #, or SSN) of the primary individual rendering each service is reported in the designated section. For services to be considered “incident to” a physician’s professional services, 1) they must be rendered under the physician’s direct supervision by his/her employee, 2) they must be an integral, although incidental part of a covered physician service, 3) they must be of kinds commonly furnished in physician’s offices, and 4) the services of non-physicians must be included on the physician’s bills.
For TRICARE claims, I further certify that I (or any employee) who rendered services am not an active duty member of the Uniformed Services or a civilian employee of the United States Government or a contract employee of the United States Government, either civilian or military (refer to 5 USC 5536). For Black-Lung claims, I further certify that the services performed were for a Black Lung-related disorder.
No Part B Medicare benefits may be paid unless this form is received as required by existing law and regulations (42 CFR 424.32).
NOTICE: Any one who misrepresents or falsifies essential information to receive payment from Federal funds requested by this form may upon conviction be subject to fine and imprisonment under applicable Federal laws.

While the aforementioned portion is one segment of the certification upon submission of the form, the provider or supplier is certifying that the claim is a “clean claim” and acknowledges that any false or fraudulent submissions or “false claims, statements, or documents, or concealment of a material fact, may be prosecuted under applicable Federal or State laws.” This is exactly what happened in the AGHS settlement.

The key take-aways from the AGHS settlement are as follows:

  1. Between August 2010 and March 2016, AGHS paid compensation to physicians in excess of fair market value to select physician groups to secure their referrals of patients and submitted claims for services;
  2. These actions were violations of the AKS, Stark Law, and the False Claims Act;
  3. A False Claims Act case was filed United States ex rel. Brouse, et al. v. Akron General Hospital System, Inc. et al., No. 5:15-cv-2720 (N.D. Ohio);
  4. The entity that acquired AGHS voluntarily disclosed the conduct and cooperated with the government and received credit for the cooperation as part of the resolution reached by the parties; and
  5. “Improper payments to physicians for referrals threaten the integrity of our health care system and deprive patients of the independent medical decision making that they deserve.”

Patient-centered care revolves around what is best for the patient and renders the best clinical outcome. Improper financial arrangements threaten the quality of medical decisions. Because Stark Law, AKS, and False Claims Act cases are of interest to both the DOJ and HHS-OIG, providers should be vigilant about the truthfulness of the claims and statements that are being submitted for remuneration by the government.

About the Author
Rachel V. Rose, JD, MBA, advises clients on compliance and transactions in healthcare, cybersecurity, corporate and securities law, while representing plaintiffs in False Claims Act and Dodd-Frank whistleblower cases. She also teaches bioethics at Baylor College of Medicine in Houston. Rachel can be reached through her website, www.rvrose.com.