Navigating the complex landscape of healthcare regulations is essential for any healthcare venture. Among the critical areas requiring careful attention are fee-splitting arrangements, the Stark Law, and the Anti-Kickback Statute. Understanding these regulations and implementing robust compliance measures can help your practice avoid significant legal pitfalls.

Fee-Splitting in Healthcare

Fee-splitting refers to the practice where a physician shares a portion of their professional fees with another individual or entity in exchange for patient referrals. This practice is considered unethical by the American Medical Association (AMA) because it can compromise the quality of care and erode patient trust. According to the AMA Code of Medical Ethics, “Payment by or to a physician or health care institution solely for referral of a patient is fee splitting and is unethical.”

In California, fee-splitting is explicitly prohibited. The state’s Business and Professions Code Section 650 states that offering, delivering, receiving, or accepting any rebate, refund, commission, preference, patronage dividend, discount, or other consideration as compensation or inducement for referring patients is unlawful. Violations can result in fines, license suspension, or revocation.

Stark Law

The Physician Self-Referral Law, commonly known as the Stark Law, prohibits physicians from referring Medicare or Medicaid patients for designated health services to an entity with which the physician or an immediate family member has a financial relationship, unless an exception applies. Notably, the Stark Law is a strict liability statute, meaning that proof of specific intent to violate the law is not required. Penalties for violations include fines and exclusion from participation in federal health care programs.

Anti-Kickback Statute

The Anti-Kickback Statute (AKS) is a federal law that prohibits the exchange (or offer to exchange) of anything of value to induce or reward referrals or generate federal health care program business. Unlike the Stark Law, the AKS is intent-based; violations occur when remuneration is knowingly and willfully exchanged for referrals. Penalties for AKS violations are severe, including criminal fines, imprisonment, and exclusion from federal health care programs.

Tips to Ensure Compliance

1. Develop a Comprehensive Compliance Program: Establish policies and procedures that address interactions with referral sources, compensation arrangements, and other areas susceptible to fraud and abuse. Regularly update the program to reflect changes in laws and regulations.
2. Conduct Regular Training: Educate all staff members about the legal requirements related to fee-splitting, the Stark Law, and the Anti-Kickback Statute. Ensure that they understand the importance of compliance and the potential consequences of violations.
3. Perform Routine Audits: Regularly review financial relationships and referral patterns to identify and address potential compliance issues. Internal audits can help detect and correct problems before they lead to legal action.
4. Seek Legal Counsel: Consult with healthcare attorneys experienced in federal and state regulations to review contracts and business arrangements. Legal experts can provide guidance tailored to your specific circumstances, helping to structure agreements that comply with applicable laws.
5. Implement Clear Contractual Agreements: Ensure that all contracts with physicians and other healthcare entities are explicit, transparent, and conform to the Anti-Kickback Statute and Stark Law requirements. Clearly define the scope of services, compensation terms, and compliance obligations.
6. Establish a Reporting Mechanism: Create a confidential process for employees and partners to report suspected violations without fear of retaliation. Encourage a culture of transparency and accountability within the organization.

Conclusion

Adhering to fee-splitting laws, the Stark Law, and the Anti-Kickback Statute is crucial for maintaining the integrity of your healthcare venture and avoiding substantial legal repercussions. By implementing comprehensive compliance programs, conducting regular training and audits, and seeking expert legal counsel, your organization can navigate these complex regulations effectively.

For personalized guidance on ensuring compliance with these laws, book a free consultation with us. Schedule your call today at https://calendly.com/andrew-mahinay/30min.