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Texas Business Owner Charged Under Healthcare Anti-Kickback Law

The owner of a Texas vision resource center was indicted recently on federal charges of soliciting and receiving illegal kickbacks following an investigation and arrest by the FBI and Department of Health and Human Services. The charges allege that the business owner violated the federal Anti-Kickback law by soliciting Medicare and Medicaid beneficiaries for the purpose of referring them to other Texas healthcare providers, receiving kickback payments totaling at least $70,000 in exchange for the referrals.

Federal Laws Limit Healthcare Referrals

Under federal law, it is illegal for individuals and organizations to give, receive, offer or solicit kickbacks in exchange for referrals for services paid for by Medicare or Medicaid. In addition to monetary payments, prohibited kickbacks also include non-monetary compensation such as the exchange of items of value. A violation of the Anti-Kickback law can result in a felony conviction with penalties including imprisonment of up to five years and a fine of up to $25,000.

Another law called the Stark law or self-referral law places additional limits on the referrals that physicians may make. The Stark law prohibits doctors from referring Medicare and Medicaid patients to other providers for certain services if the referring doctor or his or her immediate family has a financial relationship with the other provider. Among other services, the Stark law applies to referrals for:

  • Laboratory services
  • Physical therapy
  • Radiation therapy
  • Ultrasounds, MRIs and CAT scans
  • Home health services

Unlike the Anti-Kickback law, violation of the Stark law is not a criminal offense, but it can carry steep penalties including denial of payment and fines of up to $15,000 for each service that was provided as a result of an illegal referral. In addition, fines of up to $100,000 per occurrence can be imposed for arranging to circumvent the referral restriction.

Legal Help for Stark Law and Anti-Kickback Issues

Both the Stark law and the Anti-Kickback law are limited by a number of exceptions and safe harbors, so before making or receiving referrals it is important to determine how the laws apply to your specific circumstances. Likewise, if you are facing civil penalties or criminal prosecution under the Stark law or Anti-Kickback statute, it is essential to seek the advice of a qualified health care attorney.