Facing accusations of violating the Stark Law can be overwhelming and potentially career-ending for healthcare professionals. This federal regulation doesn’t allow physicians to refer patients to certain services in which they have a financial interest, creating complex compliance challenges in modern healthcare practice. Understanding your rights and defense options becomes critical in protecting your medical license and professional reputation.
In this guide, Butters Brazilian LLP will explain defense strategies for violations of the Stark Law accusations and how consulting a knowledgeable healthcare fraud defense attorney is crucial for navigating the complex legal landscape.
Understanding the Stark Law Accusations Against You
The first step in defending against Stark Law allegations involves thoroughly understanding what you’re being accused of violating. The Stark Law, formally known as the Physician Self-Referral Law, operates as a strict liability statute, meaning intent doesn’t matter for establishing violations. Your accusations likely involve one or more designated health services, which can include clinical laboratory services, physical therapy, radiology services, durable medical equipment, and hospital services. The government must prove four elements:
- That you made a referral for a Medicare or Medicaid patient
- The referral involved a designated health service
- You had a financial relationship with the entity
- No statutory exception applies
Understanding these elements helps you and your defense team identify potential weaknesses in the government’s case. Even small technical deficiencies in how the government proves these elements can be crucial to your defense strategy.
Violation of the Stark Law: Immediate Steps To Take After an Accusation
When facing Stark Law violation accusations, your immediate response can significantly impact your case outcome. Taking the right steps quickly protects your interests and preserves important evidence.
Contact Legal Counsel Immediately
Engaging a defense attorney who focuses on healthcare fraud and Stark Law violations should be your first priority before speaking with any investigators. Your attorney will guide you through the complex legal process
and protect your constitutional rights during all interactions with government agencies. Never attempt to handle these serious federal allegations without proper legal representation.
Preserve Critical Documentation
Secure all financial records, referral documentation, contracts, and correspondence related to the allegations against you. This includes employment agreements, compensation arrangements, referral patterns, and any communications with the entities involved in your case. Your legal team will need this documentation to build an effective defense strategy and identify potential exceptions that may apply.
Maintain Strict Confidentiality
Refrain from discussing the accusations with colleagues, staff, patients, or anyone except your attorney and immediate family members. Even well-meaning conversations can be misinterpreted or used against you later
in the proceedings. Instruct your office staff to refer all inquiries about the case to your legal counsel.
Review Insurance Coverage Options
Contact your professional liability insurance carrier immediately to determine if coverage applies to your Stark Law violation allegations. Many policies include coverage for regulatory investigations and defense costs, which can be substantial in complex healthcare fraud cases. Understanding your coverage options early helps you plan your defense strategy and manage potential financial exposure. Don’t attempt to resolve the matter directly with
investigators or government attorneys. Anything you say can be used against you later, even if you believe you’re providing helpful clarification.
Examining Potential Defenses and Exceptions
Stark Law compliance often hinges on whether your situation qualifies for one of the many statutory exceptions. These exceptions can provide complete protection from liability when properly structured and documented.
Common exceptions that may apply to your case include the bona fide employment relationship exception, personal services arrangements, rental of office space, and fair market value compensation arrangements. Each
exception has specific requirements that must be met exactly, including written agreements, fair market value compensation, and arms-length negotiations. Here are some key exception categories in cases of violation
of the Stark Law:
- Employment relationships: Full-time or part-time employment arrangements that meet specific criteria
- Personal services contracts: Legitimate consulting or medical director agreements
- Space and equipment rentals: Office space or equipment leases at fair market value
- Ownership interests: Certain types of investments that qualify for protection
Your defense team will carefully analyze whether your arrangements satisfy all requirements for applicable exceptions. Even minor technical deficiencies in documentation can sometimes be addressed through proper legal arguments.
The Role of Whistleblower Protections in Your Case
Many cases of violation of the Stark Law originate from whistleblower complaints filed under the False Claims Act. Understanding the role of whistleblower protections in your case helps you anticipate the government’s evidence and potential motivations behind the accusations. Whistleblowers may be current or former employees, business partners, or competitors who believe they have information about physician self-referral violations. These individuals are protected from retaliation and may gain significant financial rewards if the government
recovers money based on their information. Your defense team will carefully examine the whistleblower’s motivations, credibility, and access to relevant information. Challenging unreliable or biased whistleblower testimony can be a critical component of your defense strategy.
Responding to Government Investigations
Government investigations into Stark Law violations typically involve multiple agencies, including the Department of Health and Human Services, Office of Inspector General and the Centers for Medicare and Medicaid Services. These investigations can be lengthy and involve extensive document requests and interviews. Your attorney will help you navigate these complex proceedings while protecting your rights. This includes responding appropriately to subpoenas, preparing for potential interviews, and ensuring that your constitutional rights are preserved throughout the process. The government may also pursue civil penalties alongside criminal charges, creating multiple fronts for your defense. Understanding how these different proceedings interact is crucial for developing an effective overall strategy.
Understanding Potential Consequences and Penalties
Stark Law violations carry severe penalties that can devastate your medical career and financial future. Civil penalties can range from thousands of dollars per violation, with additional assessments possible under certain circumstances. Professional consequences you may face beyond financial
penalties include:
- Civil penalties: Fines reaching thousands of dollars per violation, with additional assessments possible
- Program exclusions: Loss of ability to treat Medicare and Medicaid patients, extending to any practice or hospital where you work
- License discipline: State medical board actions, including suspension or revocation that continue beyond federal case resolution
- Career limitations: Effective unemployability in many healthcare settings due to program exclusions
How To Protect Your Professional Reputation
While defending against the legal aspects of Stark Law accusations, you must also protect your professional reputation and practice:
- Manage communications: Collaborate with your attorney to develop effective responses to media inquiries and concerns from colleagues.
- Maintain patient relationships: Preserve patient confidence by carefully handling questions about the investigation.
- Plan for collateral impact: Consider the effects on hospital privileges, professional society memberships, and practice operations.
- Prepare for outcomes: Develop strategic plans for various case scenarios to minimize long-term damage.
Lynn Martelli is an editor at Readability. She received her MFA in Creative Writing from Antioch University and has worked as an editor for over 10 years. Lynn has edited a wide variety of books, including fiction, non-fiction, memoirs, and more. In her free time, Lynn enjoys reading, writing, and spending time with her family and friends.
