Stark law prohibits a hospital from billing Medicare for services referred by a physician with whom the hospital has an improper compensation relationship.
Here are five groups against which the Justice Department has taken action since December for allegedly exceeding fair market value in physician compensation.
1. In July, the Justice Department filed a legal complaint against two medical centers for Stark law violations that led to physician compensation that exceeded fair market value and submitting false Medicare claims.
The complaints –– filed against Murphy (N.C) Medical Center, doing business as Erlanger Western Carolina Hospital, and Chattanooga-Hamilton County (Tenn.) Hospital Authority, doing business as Erlanger Health System and Medical Center –– allege that Erlanger employed and received referrals from physicians that did not meet any Stark law exceptions. Chattanooga-Hamilton County Hospital Authority runs Erlanger Health System.
The complaint alleges the violations led to physicians being compensated in excess of fair market value and the health system "relaxed or eliminated physician compensation oversight and controls in order to recruit and retain physicians with valuable downstream revenue."
2. In March, NewYork-Presbyterian/Brooklyn Medical Methodist Hospital in New York City agreed to pay $17.3 million to resolve allegations that it paid unlawful kickbacks to physicians.
The hospital allegedly made payments to physicians at the hospital's chemotherapy infusion center, where physician compensation was linked to the number of referrals made for services at the center, according to a March 12 news release from the Justice Department.
3. The Justice Department filed a complaint against financially troubled Dallas-based Steward Health Care System alleging violations of the physician self-referral law and submission of false claims to Medicare. The complaint claims that between January 2013 and March 2022, Steward Medical Group overpaid Arvind Agnihotri, MD, chief of cardiac surgery at Steward St. Elizabeth's Medical Center in Boston, in relation to fair market value and linked the compensation to the volume or value of his referrals to the hospital.
The government also alleges that the medical group paid Dr. Agnihotri nearly $5 million in incentive pay tied to the number of cases Dr. Agnihotri referred to the hospital, among other allegations.
4. In December, Indianapolis-based Community Health Network agreed to a $345 million settlement to resolve allegations that, dating to 2008, it violated the False Claims Act and Stark law.
The U.S. complaint alleged that, starting in 2008, CHN's senior management engaged in a scheme to recruit physicians for employment with outsized pay in an effort to secure profitable referrals. The salaries offered to cardiologists, cardiothoracic surgeons, vascular surgeons, neurosurgeons and breast surgeons for CHN employment were sometimes up to double what physicians earned in private practices.
5. In October, Cardiac Imaging, based in Oakbrook Terrace, Ill., and its founder and CEO, Sam Kancherlapalli, agreed to pay more than $85 million to resolve allegations they paid referring cardiologists excessive fees to supervise PET scans between March 2014 and May 2023.
The fees substantially exceeded fair market value for cardiologists' services and they were paid for each hour the company spent scanning patients, including time the cardiologists were away from the mobile scanning units, the U.S. alleged. The lawsuit alleged this violated the Anti-Kickback Statute and Stark law.