On November 15, 2019, the Department of Justice (DOJ) announced it had reached a settlement with Sutter Health (Sutter) and Sacramento Cardiovascular Surgeons Medical Group Inc. (Sac Cardio) to resolve alleged violations of the Physician Self-Referral Law (PSR Law), commonly known as the Stark Law. Sutter is a California-based health services provider; Sac Cardio is a Sacramento-based practice group of three cardiovascular surgeons. The total settlement in excess of $46 million includes $30.5 million from Sutter to resolve allegations of an improper financial relationship specific to compensation arrangements with Sac Cardio. Sac Cardio has agreed to pay $506,000 to resolve allegations of duplicative billing associated with one of these compensation arrangements. Separately, the settlement includes another $15,117,516 from Sutter to resolve self-disclosed conduct principally concerning the PSR Law.
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Stark Law
CMS Proposes to Newly Define Commercially Reasonable, and Tweak Definition of Fair Market Value, in New Physician Self-Referral Law (Stark Law) Regulations
By Conor Duffy on
On October 17, 2019, the Centers for Medicare & Medicaid Services (CMS) formally published its proposed rule (PSR Rule) to update exceptions to the Physician Self-Referral Law (PSR Law, also known as the Stark Law). For our initial overview of the PSR Rule (and of the Office of Inspector General’s corresponding proposal to update the Anti-Kickback Statute) see here. The PSR Rule contains a number of important proposals to update the PSR Law, including putting forward a definition of the term “commercially reasonable” and revising the definition of “fair market value.” These terms and concepts are essential to PSR Law compliance, and constitute key elements of a number of exceptions to the PSR Law, including for space and equipment leases, employment arrangements, and isolated financial transactions.
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CMS Proposes Rule Clarifying Physician Self-Referral Law Rules for Group Practice Profit Sharing
By Robinson+Cole's Health Law Group on
On October 9, 2019 the Department of Health and Human Services Centers for Medicare and Medicaid Services (CMS) published a proposed rule making changes to the Physician Self-Referral Law (PSR Rule), also called the Stark Law. Among other revisions to the PSR Rule, the proposed rule would modify the group practice special rule that allows physician profit sharing in certain circumstances. Under the proposed rule, the “overall profits” group practice physicians can share must be a combination of all designated health services (DHS) profits, not just the DHS profits from the type of service the physician renders. The clarification is significant as it resolves lingering uncertainty regarding proper compensation arrangements for group practice physicians.
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HHS Proposes Changes to Permit Donation of Cybersecurity Technology
On October 17, 2019, the Department of Health and Human Services (HHS) published proposed rules to update the regulatory Anti-Kickback Statute (AKS) safe-harbors and exceptions to the Physician Self-Referral (PSR) Law, known commonly as the Stark Law (AKS proposed rule available here; PSR proposed rule available here). In an earlier blog post, we described each of the proposed rules. Among the proposed changes are a new safe harbor/exception that would generally permit entities to donate certain cybersecurity technology and related services to physicians, subject to compliance with the conditions described below. In the preamble to each proposed rule, the HHS Office of Inspector General (OIG) (which published the AKS proposed rule) and the Centers for Medicare and Medicaid Services (CMS) (which published the PSR proposed rule) noted that cyber-attacks in the health care industry are on the rise and cybersecurity technology can be cost-prohibitive for some providers. Both OIG and CMS stated their hope that the proposed rules will improve overall cybersecurity in the health care industry and reduce instances of data breaches resulting from cyber-attacks.
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Government Releases Proposed Rules on Physician Self-Referral Law (Stark Law), Anti-Kickback Statute and CMP Law; Significant Regulatory Changes Intended to Encourage Care Coordination and Value-Based Care
By Conor Duffy & Melissa (Lisa) Thompson on
Posted in Academic Medical Centers, Accountable Care Organizations, Commercial Health Insurance, False Claims Act, Fraud and Abuse, Government Enforcement, Health Information Exchanges and Electronic Medical Records (EMRs), Health Information Technology, Hospitals and Health Systems, Legislation, Medicare and Medicaid, Office of Inspector General, Physicians and Allied Health Professionals, Reimbursement, Stark Law
On October 9, 2019, the Department of Health and Human Services (HHS) released its long-awaited proposals (the Proposed Rules) to update regulatory exceptions and safe harbors, for the federal Physician Self-Referral Law (also known as the Stark Law), the Anti-Kickback Statute (AKS), and the beneficiary inducement Civil Monetary Penalties Law (CMP). The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to update exceptions to the Physician Self-Referral Law (the PSR Rule), and the HHS Office of Inspector General (OIG) issued a proposed rule to update the AKS safe harbors and expand exceptions to the CMP’s beneficiary inducements prohibition (the AKS Rule). The Proposed Rules are intended to reduce perceived regulatory barriers to beneficial health care arrangements, and to facilitate the implementation of new approaches to health care service delivery and coordination, including value-based care models.
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Department of Justice Announces Significant False Claims Act Settlements Tied to Electronic Health Records Arrangements
By Conor Duffy on
Posted in Accreditation, Department of Justice, False Claims Act, Fraud and Abuse, Government Enforcement, Health Information Exchanges and Electronic Medical Records (EMRs), Health Information Technology, Healthcare Technology, Hospitals and Health Systems, Life Sciences, Medicare and Medicaid, Office of Inspector General, Physicians and Allied Health Professionals, Reimbursement, Stark Law
The Department of Justice (DOJ) recently announced two high-dollar False Claims Act (FCA) enforcement actions involving allegedly fraudulent arrangements tied to the implementation and use of electronic health record systems (EHRs). The respective settlements enable recovery by DOJ of over $100 million, and immediately precede the government’s recent proposal of new rules to promote the interoperability of EHRs. The settlements thus serve as an important reminder of the importance of adhering to federal fraud and abuse laws and regulations as hospitals and other health care providers continue to implement EHR technology.
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One-Two Punch: On Consecutive Days, DOJ Announces High Dollar Fraud and Abuse Settlements with Hospitals
The Department of Justice (DOJ) announced two significant False Claims Act (FCA) settlements in recent days that signal continued close government scrutiny of billing, coding and referral practices at hospitals.
On August 2, DOJ announced an $84.5 million dollar settlement with Michigan-based health system William Beaumont Hospital. The settlement resolves allegations of non-compliance with the…
CMS issues Request for Information on the burdens the Stark Law may Impose on Care Coordination
By Robinson+Cole's Health Law Group on
The Centers for Medicare and Medicaid Services (CMS) issued a Request for Information (RFI) seeking input from the public on the burden the Stark Law may impose on patient care and recommendations on how to address any undue impact, specifically on care coordination.
The Stark Law, also known as the physician self-referral law, prohibits a …
Bipartisan Budget Act Revises Stark Law, Increases Penalties for AKS and CMP Law Violations, and Expands Telehealth Coverage
On February 9, 2018, Congress passed the Bipartisan Budget Act of 2018 (the Act), which included a number of important health law provisions..
AKS and CMP Violations
Under the Act, Congress doubled the statutory civil fines for certain violations of the Anti-kickback Statue (AKS) and adjusted certain fines under the Civil Monetary Penalty (CMP) Law. The Act also increased the maximum criminal penalty from $25,000 to $100,000 and increased the maximum incarceration period from five years to ten years.
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CMS Approves Laboratory Alerts to Physicians in Rare Stark Law Advisory Opinion
The Centers for Medicare & Medicaid Services (CMS) issued a rare advisory opinion (CMS-AO-2017-1) under the Stark Law (Section 1877 of the Social Security Act, codified at 42 U.S.C. § 1395) earlier this fall, addressing a proposed arrangement under which a web-based diagnostic testing portal sought to provide referring physicians with free alerts related to test results.
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