Understanding The Laws That Govern Medical Referrals

Although many doctors work closely together and make referrals based on positive professional relationships, every physician must be careful to stay on the right side of anti-kickback and self-referral laws. Your practice is subject to both Stark Law & Anti-Kickback regulations.

The law firm of Kevin Cauley, P.C. strives to provide clear, proactive guidance so you can operate your practice without the day-to-day worries of compliance.

In addition, we zealously defend health care providers accused of violating the vast and complex laws governing health care provider contracting and assist health care providers and practices implement corrective action

Acts That Reward Referrals Prohibited Under Anti-Kickback

The federal Anti-Kickback Statute is an extensive regulation that prohibits anyone from knowingly and willfully offering or receiving payment in exchange for generating business for Medicare, Medicaid or other federal health care programs. Violation of this statute is a felony, with criminal penalties of up to five years in prison and a $25,000 fine as well as civil penalties.

On the surface, this law is incredibly broad. However, some activities that seem to violate the statute have been carved out as safe harbors, such as:

  • Space rental
  • Equipment rental
  • Employee compensation
  • Sale of a practice
  • Discounts
  • Warranties

The safe harbors under Anti-Kickback have their own elements that must be met to avoid liability. This is why it is so important to work with an attorney experienced in this area.

Physician Self-Referral Prohibited Under Stark Law

The Stark Law prohibits doctors from referring Medicare or Medicaid patients to another entity for Designated Health Services if they or an immediate family member have a financial stake in that entity. It is a strict liability statute, meaning a physician can be held liable even if they did not intend to break the law.

Unlike Anti-Kickback, this law is not a criminal statute. But, a violation can still lead to fines and exclusion from federal health care programs. There are exceptions available which, like the safe harbors of Anti-Kickback, have their own elements that must be met.

Protect Your Practice

For comprehensive advice regarding these statutes, call a lawyer at our Los Angeles firm at 213-465-1153 or use our online contact form to schedule a consultation. We represent clients across California.