Unlawful Medicare and Medicaid Referrals Under Stark Statute

In 1989, the United States Congress enacted the Stark statute which made it illegal for physicians to make self-referrals and prevented physicians from referring Medicare or Medicaid patients for certain designated health services to any entity with which the physician has a financial interest. The purpose of this law was to remove economic incentives that may encourage some physicians to make self-referrals or to refer certain designated health services to entities in which the physician has a financial interest, instead of referrals based on a patient's health and well being.

Stark Violation Claims and Stark Violation Lawsuits

Stark violations occur when a physician (as defined by Medicare) unlawfully refers Medicare or Medicaid patients to an entity in which the physician or the physician's immediate family has a financial interest. In these situations the physician is usually making these referrals for the purpose of the physician's own financial gain and is not working in the best interest of their patients. Repeated violations of the Stark Statute can create substantial wealth for self referring doctors and can cost tax payers millions, tens of millions, or even hundreds of millions of dollars. These violations can also be hard to detect by the government and patients. For this reason it is often health care administrators, hospital administrators, benefit coordinators, accountants, and other health care professionals that are able to discover fraudulent referral practices and blow the whistle on the unlawful practice.

Violations of the Stark Statute can result in both criminal and civil penalties for the self referring doctor as well as others benefiting from the fraudulent referral practices. Whistle blowers that properly blow the whistle on these unlawful referrals can not only regain large amounts of money for the United States government, saving tax payers millions of dollars that the physician and/or the entity have taken from the federal government, but the whistle blower can also collect a percentage of this recovery as compensation for bringing a Federal False Claim Act lawsuit that reveals these fraudulent referral practices.

The History and Evolution of the Stark Statute

The Stark Statute is named after California Representative Pete Stark who authored this legislation to prevent fraudulent referral practices that compromised the health of patients, cost the government billions of dollars, and made unethical doctors rich at the expense of patients and taxpayers. Congressman Pete Stark first proposed the Federal physician anti self-referral law in 1988, and what became known as "Stark I" was enacted by the Congress in 1989. At the same time Congress overhauled Medicare's physician payment program and adopted the Resource-Based Relative Value Scale (RBRVS) which is a system used to determine how much money medical providers should be paid by Medicare. The Stark I law initially applied only to clinical laboratory services and became effective with the Medicare fee schedule on January 1, 1992. The Health Care Financing Administration proposed implementing regulations for Stark I in March of 1992, and these rules were finalized on August 14, 1995. They have been codified at 42 C.F.R. 411.350 et seq.

In 1993, Medicare and Medicaid amendments were enacted by Congress that significantly expanded the Stark law to cover a long list of designated health services in addition to clinical lab services. These amendments added the referral prohibition to additional designated health services including: inpatient and outpatient hospital services; physical therapy; occupational therapy; radiology; radiation therapy (services and supplies); durable medical equipment and supplies; parenteral and enteral nutrients (equipment and supplies); prosthetics, orthotics and prosthetic devices and supplies; outpatient prescription drugs; and home health services. These amendments, which became effective January 1, 1995, became known as "Stark II."

Medicare and Medicaid Referral Violation Law Suits
(Qui Tam Law Suits)

Through Whistle Blower Lawsuits, Qui Tam Lawsuits, and other Health Care Fraud Lawsuits, hundreds of billions of dollars have been recovered from individuals and organizations that have committed health care fraud and stolen large amounts of money from the government. For more information on Stark Statute Violations and Medicare or Medicaid Referral Violation Law Suit, please go to the following web page on Medicare and Medicaid Referral Fraud Stark Violation Law Suits.