Here are 11 Stark law violations Becker's has reported on in 2024 and where they occurred:
California
– In July, Palo Alto, Calif.-based oncology company Guardant Health announced it will pay $913,933 to settle allegations it violated Stark law. The Justice Department alleged that Guardant submitted claims and received payments from Medicare for laboratory services that had been referred to in violation of Stark Law. Guardant also allegedly knowingly submitted or caused the submission of false claims for payments.
In April 2021, a physician in Austin, Texas, contacted Guardant’s human resources department to recommend a family friend for an account manager position. The family friend was hired. In October 2021, the physician sought a position for his stepdaughter, who was considered, but rejected, for a position in the company's screening division.
In February 2022, two Guardant employees arranged for the family friend to be promoted, opening a role in the oncology division for the stepdaughter. The two employees knew about the relationship and knew the stepdaughter was not qualified for the role.
Illinois
– A cardiac imaging company and its CEO agreed in April to pay more than $85 million to resolve False Claims Act allegations. Cardiac Imaging, based in Oakbrook Terrace, Ill., and its founder and CEO, Sam Kancherlapalli, were accused of paying referring cardiologists excessive fees to supervise PET scans. The lawsuit alleged this violated the Anti-Kickback Statute and Stark law.
Mississippi
–In November, a federal district court in Mississippi denied a motion to dismiss a lawsuit against Corinth, Miss.-based Magnolia Regional Health Center and its joint venture cancer center, Magnolia Cancer Center, alleging Stark law and antikickback violations. The lawsuit, filed by cancer center's former executive director, alleges an illegal kickback scheme where physician investors were financially incentivized to refer patients to the center, despite no formal referral requirement.
The lawsuit claims that physician investors' increased referrals directly boosted their investment income, and defendants also falsely certified compliance with these laws when submitting claims to Medicare.
New York
–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.
Philadelphia
– In May, Pittsburgh-based UPMC agreed to pay $38 million to settle a whistleblower lawsuit alleging neurosurgeons employed by the health system submitted false claims. The suit was filed against the health system and 13 staff neurosurgeons in 2012 by former UPMC neurosurgeon William Bookwalter, MD, neurophysiologist Robert Sclabassi, MD, PhD, and surgical technologist Anna Mitina.
The suit alleged some neurosurgeons submitted claims for purportedly assisting with procedures performed by other surgeons or residents, even though they did not assist nor supervise. Additionally, one neurosurgeon allegedly submitted fraudulent claims to Medicare for levels of spinal decompression not performed. The allegations also resolved claims neurosurgeons were paid excessive compensation and surgeons referred procedures and surgeries to UPMC in violation of Stark law.
– In May, Pittsburgh-based Penn Highlands Healthcare and several of its hospitals agreed to pay $735,000 to resolve False Claims Act and Stark law infringement allegations.
Penn Highlands DuBois allegedly violated the Stark law from July 1, 2009, through June 30, 2012, by paying improper compensation to medical providers. Gary Ott, MD, and another physician at Dr. Ott's practice were paid $420,000 under a consulting agreement for employment services allegedly performed before the agreement went into effect, during which time neither physician was employed by Penn Highlands DuBois.
South Dakota:
– Siouxland Surgery Center, doing business as Dakota Dunes, S.D.-based Dunes Surgical Hospital, United Surgical Partners International and USP Siouxland, agreed to pay about $12.76 million to resolve Stark law and False Claims Act allegations.
From at least 2014 through 2019, Dunes Surgical Hospital made large financial contributions to a nonprofit affiliate of a physician group that made patient referrals to Dunes Surgical Hospital. The agreement also resolves allegations that during the same period, Dunes Surgical Hospital provided a different physician group with free or below market value clinic space, staff and supplies.
Tennessee:
–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 complaint — 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 — alleges 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."
Texas:
– A Denton, Texas-based medical center paid $14.2 million to settle alleged violations of Stark law and Medicare regulations related to four ASCs in the Dallas-Fort Worth area, specifically in Dallas, Richardson and Coppell.
Horizon Medical Center, which operates a long-term acute care hospital with several ASCs, self-reported that it failed to include a modifier and location to identify services performed at non-excepted, off-campus outpatient facilities when submitting claims to Medicare, according to a Nov. 4 news release from the Justice Department.
Horizon disclosed that it had entered into management agreements with third-party companies affiliated with physicians performing surgery at its outpatient facilities. It also leased equipment through operating agreements with companies affiliated with those same physicians.
– In March, it was announced a Houston physician and his facilities will pay $1.8 million to settle allegations of submitting fraudulent Medicare and Medicaid claims and violating Stark law.
From July 2014 to July 2017, Mohammad Athari, MD, and United Neurology allegedly falsely billed Medicare for medically unnecessary services, as the patients' diagnoses did not support them or untrained technicians inaccurately rendered them.
West Virginia
–In November, a West Virginia federal district court dismissed a false claims lawsuit filed against Thomas Health System, citing insufficient detail in the plaintiff's allegations. The case was originally filed in November 2020 by a former nurse, who claimed that Thomas Health violated the Stark law by structuring physician compensation in a way that improperly considered physician referrals, among other alleged violations
In its decision, the court ruled that the complaint did not meet the required standards for particularity, stating that it lacked "details of fraud — causally linked together — to form a plausible and particular claim." The court further noted that “defendants should not be subject to further litigation under the shadow of a haphazardly pled 82-page complaint.”