Chapter 3. The Stark Law and Anti-Kickback Statute as FCA Risks

Many False Claims Act (FCA) cases are premised on alleged violations of the federal Physician Self-Referral Law, 42 U.S.C. § 1395nn (Stark Law) and the federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b) , and often on both. The theory is that claims submitted to federal healthcare programs are tainted, and hence false, if the services for which payment is claimed are performed as a result of a violation of the Stark Law or Anti-Kickback Statute. The Stark Law and Anti-Kickback Statute are both designed to prevent financial relationships from corrupting healthcare decision-making, but they take very different approaches in achieving those aims.

The Stark Law is a civil law and takes a “strict liability” approach, meaning a party is legally responsible for an impermissible activity, regardless of whether intent to harm or actual negligence were involved. The law aims to prevent conflicts of interest in financial relationships that might interfere with a physician’s exercise of unfettered medical judgment, regardless of the intentions of the parties to the arrangement. By contrast, the Anti-Kickback Statute is a criminal law that seeks to prevent financial arrangements that are entered into with the corrupt intent of trying to influence the other party’s judgment. Despite these important differences, it is common for FCA cases to involve allegations of both Stark Law and Anti-Kickback Statute violations, and a common set of alleged facts (and related issues arising from those alleged facts) often form the basis for these FCA allegations. Likewise, there are many similarities in the strategies used to prevent and mitigate these issues and address them in response to an internal or external investigation.

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