Identifying Stark Law violations in New Jersey and Pennsylvania

The Stark Law is part of the Social Security Act. It is directed toward physicians and doctors who refer patient matters to entities in which they (the physician or doctor) have a self-interest. Named after US Congressman Pete Stark, the law is enforced in New Jersey, Pennsylvania and nationwide because the priority should be the patient and physician self-referrals corrupt the medical system. The key elements of a Stark law violation (a physician referral to an entity that the doctor has a self-interest in) are:

  • Self interest defined.
    • Self interest means an entity in which the physician has a financial interest.
    • Financial interest means ownership, investment interests and/or compensation interests. The interest can be direct or indirect.
    • Self interest can also include an immediate family member.
  • Referral defined. Referral means (for Medicare Part B services). It applies to these “Designated Health Services.”
    • Plan of care including where the services are provided and laboratory services.
    • Physical-therapy services
    • Occupational-therapy services;
    • Radiology, including magnetic resonance imaging, computerized axial tomography scans, and ultrasound services;
    • Radiation-therapy services and supplies;
    • Durable medical equipment and supplies;
    • Parenteral and enteral nutrients (feeding through veins or the gastrointestinal tract),
    • Medical equipment, and supplies;
    • Prosthetics, orthotics, and prosthetic devices;
    • Home health services and supplies;
    • Outpatient prescription drugs; and
    • Inpatient and outpatient hospital services
  • Exceptions. There are some exceptions where self-interested physician referrals are allowed:
    • Physician services
    • In-office ancillary services
    • Services furnished by an organization (or its contractors or subcontractors) to enrollees
    • Implants furnished by an ASC (Ambulatory Surgical Center)
    • EPO (Erythropoietin) and other dialysis-related drugs
    • Preventive screening tests, immunizations and vaccines
    • Eyeglasses and contact lenses following cataract surgery
    • Intra-family members in rural area
    • Ownership or investment interests involving publicly-traded securities
    • Mutual funds
    • Rural Providers
    • Certain physician-owned hospitals
  • Penalties – penalties authorized through the Stark law include:
    • Denial of payment by the government.
    • Return of monies received to the entity that paid the money.
    • Civil penalties – up to $15,000 for each service that a person “knows or should know” was provided in violation of the Stark Law,
    • Treble damages –  three times the amount of improper payment that the physician  received from the Medicare program;
    • Exclusion from the Medicare program and/or state healthcare programs including Medicaid;
    • Civil penalties for attempting to circumvent the Stark Law of up to $100,000 for each circumvention scheme.
  • Stark law as a basis for other violations. Stark violations may also be violations of other laws.
    • Federal Laws
      • False Claims Act
      • Anti-Kickbacking Laws
      • Anti-Markup Laws
    • State Laws
      • Most states have their own laws on referrals that may apply

How can a lawyer help? A lawyer can:

  • Review whether a “referral” was made
  • Review whether the physician had a self-interest
  • Review whether a “designated health service” was involved
  • Review whether an exception applies
  • Review whether other laws apply.

How Begelman & Orlow can help

If you think you have a whistleblower claim, or if you know or suspect a physician has referred a patient matter to an entity that the physician has a self-interest in, you have been retaliated against because you brought a whistleblower claim, contact the lawyers at Begelman & Orlow, P. C.. Our lawyers have over 115 years experience protecting your rights. Call us at 866-627-7052 now. We have offices in Cherry Hill, New Jersey, and in Conshohocken, Pennsylvania.

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