Fraud and Abuse 101: Considerations for Nearly Every Health Care Arrangement

Fraud and abuse laws such as the anti-kickback statute and the Stark Law dictate the boundaries of nearly every ownership and compensation arrangement entered into by health care providers. Healthcare organizations must structure arrangements in compliance with these requirements to avoid criminal penalties, civil penalties and potential claw backs from payors. 

The federal anti-kickback statute (“AKS”) prohibits healthcare providers from giving or receiving any kind of remuneration in return for the referral of services for Medicare, Medicaid or other federal healthcare program beneficiaries. The easiest way to do comply with the AKS is by structuring arrangements to meet one of the available safe harbors provided under the law. However, failure to comply with a safe harbor is not the only way to comply. Rather, an arrangement that does not meet a safe harbor will be analyzed under the “totality of circumstances” to determine whether it violates the AKS. When structuring an agreement to comply with the AKS under a safe harbor or under the totality of circumstances analysis, it is vital to work with counsel specializing in these issues to avoid any potential criminal liability. 

The Stark law prohibits physicians from making referrals for certain types of Medicare and Medicaid services to entities with which the physician (or an immediate family member of the physician) has a financial relationship. Unlike the AKS where it is not absolutely necessary to comply with the elements of a safe harbor, compliance with the Stark Law requires meeting all the elements of at least one exception. Providers should work with counsel in analyzing whether the Stark Law is raised by a certain arrangement and, if so, whether the arrangement can be structured to comply with an applicable exception. 

In addition to the AKS and the Stark Law, providers must also consider other federal laws that might be implicated such as the Civil Monetary Penalties Laws and the anti-markup rule. 

Every state has its own set of fraud and abuse laws which may be the same or different from the federal laws. These laws typically apply to all payors and all patients, and therefore can be broader than federal laws in their application.

Health care providers also have to consider requirements of private payors, Medicare, and other payor conditions of participation or certification which may be part of the contract or other provider manual.  Often payors try to claw back reimbursements based on alleged non-compliance with these requirements. Providers should work with counsel to establish policies and procedures which comply with these requirements as well as fighting an unjust claw back. 

Eliav Legal works with providers and other entities in the healthcare industry to ensure their financial arrangements comply with federal and state fraud and abuse laws.  Contact us today for a free no obligation consultation.