Category Archives: Stark Law

Family Medicine Centers of South Carolina Paid $2 Million to Settle Alleged Stark Law Violations Based on Internal Physician Compensation Approach

On September 11, 2017, the U.S. Attorneys’ Office for the District of South Carolina announced a settlement with the Family Medicine Centers of South Carolina based in part on allegations that the practice’s internal physician compensation approach violated the Stark Law, and resulted in the submission of false claims to the Medicare and Tricare programs. Family Medicine Centers are a physician-owned chain of family medicine clinics located in and around Columbia, South Carolina.

The allegations in this settlement arose from a lawsuit filed by a physician formerly employed by the Family Medicine Centers of South Carolina under the whistleblower provisions of the Federal False Claims Act. The allegations included the Stark Law was violated by the Family Medicine Center’s (FMC) incentive compensation plan that paid its physicians a percentage of the value of laboratory and other diagnostic tests that they personally ordered through FMC, and then FMC billed the Medicare program. According to the government’s press release, FMC’s physician ceo allegedly reminded FMC’s physicians that they needed to order tests and other services through FMC in order to increase FMC’s profits and to ensure that their take-home pay remained in the upper level nationwide for family practice doctors. Continue reading

South Carolina Hospital to Pay $17 Million to Resolve False Claims Act and Stark Law Allegations

On July 28, 2016, the U.S. Department of Justice announced, “The Lexington County Health Services District Inc. d/b/a Lexington Medical Center located in West Columbia, South Carolina, has agreed to pay $17 million to resolve allegations that it violated the Physician Self-Referral Law (the Stark Law) and the False Claims Act by maintaining improper financial arrangements with 28 physicians.”

According to the government press release, “The United States alleged that Lexington Medical Center entered into asset purchase agreements for the acquisition of physician practices or employment agreements with 28 physicians that violated the Stark Law because they took into account the volume or value of physician referrals, were not commercially reasonable or provided compensation in excess of fair market value.

Also as part of the settlement, Lexington Medical Center will enter into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services-Office of the Inspector General (HHS-OIG) that requires Lexington Medical Center to implement measures designed to avoid or promptly detect future conduct similar to that which gave rise to this settlement.

Written by: Clay J. Countryman

Countryman, Clay headshot

OIG Corporate Integrity Agreements and Physician Compliance Programs

In settling allegations of violating the False Claims Act (FCA), healthcare providers often enter into a Corporate Integrity Agreement with the OIG in exchange for the OIG’s agreement not to exclude the provider from participation in Medicare or other federal health care programs. Corporate Integrity Agreements (CIAs) generally require a provider to establish or supplement an existing compliance program, with detailed requirements described in the CIA. Continue reading

Recent False Claims Act Settlements Based on Hospital-Physician Compensation Arrangements

During the fall of 2015, the Department of Justice (DOJ) issued several press releases announcing large False Claims Act settlements based on alleged Stark Law violations related to hospital-physician compensation arrangements.  The following are three recent False Claims Act settlements involving allegations related to excessive and improper compensation arrangements between hospitals and physicians: Continue reading

Thinking Outside the Country: Recruiting Foreign Physicians

In recruiting doctors, hospitals must navigate several minefields which include Stark law and the Anti-Kickback Statute. Yet, a rarely considered issue when recruiting physicians is whether immigration laws have been violated. Generally, non-resident aliens who have completed a residency or fellowship training program in the United States must return to their home country for two years before they can work in the United States. Continue reading