The Stark Act has Stark Remedies – $237 Million False Act Judgment

In July 2018, the Department of Justice announced the enforcement of a $237 Million Dollar Judgment against a Healthcare System for Medicare Fraud – a judgment that was entered in May of 2013. The basis of the Medicare Fraud stemmed from violations of the Stark Act in which the medical system is forbidden from self-dealing. It is unlikely the government will see all that money however, as per the terms of the settlement the government will receive roughly $72 million dollars and the offending facilities will be sold off.

The Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division stated, “Secret sweetheart deals between hospitals and physicians, like the ones in this case, undermine patient confidence and drive up healthcare costs for everybody, including the Medicare program and its beneficiaries “This case demonstrates the United States’ commitment to ensuring that doctors who refer Medicare beneficiaries to hospitals for procedures, tests and other health services do so only because they believe the service is in the patient’s best interest, and not because the physician stands to gain financially from the referral. The Department of Justice is determined to prevent the kind of abuses uncovered in this case, and we are willing to take such cases to trial to protect the integrity of the Medicare program.”

The Stark Law prohibits hospitals from billing Medicare for certain services (including inpatient and outpatient hospital care) that have been referred by physicians with whom the hospital has an improper financial relationship. The Stark Law has exceptions and exceptions to the exceptions so it is important to consult with a whistleblower law firm if you have knowledge of what you think may be improper self-dealing or a potential kickback type of situations.

At trial the government introduced evidence that the defendant required physicians to refer their outpatient procedures to them and then in turn overpaid them from Medicare for the referred procedures. They did so despite being cautioned that this could constitute medicare fraud and violations of the Stark Law. A jury heard the evidence and ruled for the government which was affirmed by the Fourth Circuit Court of Appeals.

The case was initiated by a physician who had the courage to refuse to sign the illegal contract and thus retained a Whistleblower Law Form to commence a qui tam under the False Claims Act. The statute provides the whistleblower up to 30% recovery with 20% being the norm, and in this case the Doctor will receive a whistleblower award of roughly $18 million dollars for having the courage to do the right thing.

“The type of abusive compensation arrangements at issue in this case is precisely what the physician self-referral law was designed to prevent,” said Inspector General Dan Levinson of the Department of Health and Human Services-Office of the Inspector General (HHS-OIG). “Patients need and deserve to know that the hospital services they receive are the product of sound medical judgment, rather than motivated by the physician’s financial interests. The extensive litigation and settlement in this case should send a signal to the hospital industry that these tainted financial relationships simply will not be tolerated.”

If you know of any similar type of Medicare Fraud or are unsure about whether an arrangement in the health care field is legal or illegal you should consult with a whistleblower law firm like the JTB Law Group, LLC at (877) 561-0000. Generally, whistleblower lawyers are only paid if they win your case and can provide free confidential consultations.