Category Archives: Fraud – Stark

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Kosenske Whistleblower Case Will Present False Claims Act Issues to Jury

The United States District in Kosenske v. Carlisle HMA Inc. has concluded that this whistleblower case must go to trial on the factual issue of whether Carlisle Hospital violated the False Claims Act by submitting claims for anesthesia services provided arising from referrals from Blue Mountain Anesthesia Associates (BMAA). Dr. Kosenske, the whistleblower in this case, … Continue Reading

PPACA STARK In Office Ancillary Service (IOAS) Disclosure Requirement

Section 6003 of the Patient Protection and Affordable Care Act (PPACA), which is the 2010 Healthcare Reform Act, imposes a new disclosure requirement for in office ancillary service referrals of imaging services.  Section 6003 requires that referrals of MRI, CT, PET, and other designated health services as specified by the secretary, must be accompanied by … Continue Reading

Stark Lease Violations Generate $1.5 in False Claim Penalties for Rush Medical

  This is a Stark settlement that will send chills down the spines of hospital compliance officers. Rush Medical Center has entered into a Settlement Agreement with the DOJ, in which they agree to pay approximately $1.5 in False Claims Act Penalties. The settlement arose out of a qui tam (whistleblower) lawsuit filed in July 2004. The … Continue Reading

October 1, 2009: Effective Date of New Stark Rules

This is just a reminder of the effective date for certain new Stark Rules: 1.         CMS prohibits percentage formulae conjunction with space on equipment leases, fair market value exception transactions and indirect compensation effective October 1, 2009. 2.         Per click leases are prohibited effective October 1, 2009. 3.         "Under arrangement" relationships have been changed because … Continue Reading

Covenant Medical Center to Pay U.S. $4.5 Million to Resolve False Claims Act and Stark Law Allegations

The U.S. Department of Justice issued a press release on August 25, 2009 announcing a $4.5 million False Claims Act Settlement against an Iowa hospital, Covenant Medical Center. The False Claims Act liability allegations were based upon charges by the Attorney General that paying excessive compensation violated the Stark Law. Based upon IRS 990 forms, the … Continue Reading

OIG Advisory Opinion 09-05 Approves Physician On Call Compensation

The Office of Inspector General of the Department of Health and Human Services has issued Advisory Opinion No. 09-05, which states that the OIG will not impose sanctions regarding a proposed on call arrangement in which the hospital will compensate physicians for providing on call coverage for patients presenting to the hospital or emergency department. The … Continue Reading


OIG issues another in a string of gainsharing opinions involving hospitals and groups of cardiologists and radiologists. This and the solicitation by HHS of comments on shared savings exceptions and safe harbors confirm HHS’s intent to continue to encourage legitimate cost savings and incentive programs. Link:  … Continue Reading


Advisory Opinion 08-16, the text of which is linked below, involved a nonprofit hospital’s Pay for Performance (P4P) program with a commercial insurer and certain physicians on the hospital’s medical staff. Under the P4P program, the insurer pays the hospital bonus compensation calculated as percentage of the annual base compensation it otherwise pays to the … Continue Reading

Stark IV: Per-Click Leases; Stand-in-Shoes; and Disallowance

The Department of Health and Human Services and Centers for Medicare and Medicaid Services (CMS) published final Stark IV regulations in the Federal Register on August 19, 2008. The web link is ttp:// The final regulations cover issues in addition to physician self-referral. Three issues of particular interest are the per-click compensation arrangements, the Stand-in-shoes regulations, and compliance … Continue Reading

CMS Proposes New “Stands in Shoes” Regulations

STARK: "STAND IN SHOES" REGULATIONS The original proposed physician "Stand in Shoes" regulations provide that any physician would stand in the shoes of any other doctor in the following circumstances: 1.      Another physician who employs the referring physician; 2.      His or her wholly owned professional corporation; 3.      A physician’s medical practice that employs or contracts with … Continue Reading

CMS Posts Stark FAQs

CMS recently modified its website to include a new page called Frequently Asked Questions and just added twelve questions and responses under the Physician Self-Referral page. Access the FAQs. at… Continue Reading

2008 Medicare Physician Fee Schedule Delays Stark Rules

2008 MEDICARE PHYSICIAN FEE SCHEDULE DELAYS STARK RULES CMS announced in the 2008 Medicare Physician Fee Schedule final rule that the following proposed revisions will not be finalized until the future publication of a final rule: §                     burden of proof; §                     obstetrical malpractice insurance subsidies; §                     unit of service (per click); §                     payments in lease … Continue Reading

OIG Issues 2008 Work Plan

The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) has issued its fiscal year 2008 Work Plan, identifying investigation projects for the coming fiscal year relating to the Medicare and Medicaid programs. Following is a copy of pages 3 through 13 of the 2008 OIG Work Plan, which identify the … Continue Reading

More Stark III Changes: Physician Recruitment

MORE STARK III CHANGES: PHYSICIAN RECRUITMENT There have been a number of definitional or technical changes to the physician recruitment exception. ·        The definition of the hospital’s geographic service area, which was previously the area composed of these contiguous zip codes from which the hospital drew 75% of its inpatients, has been tweaked to exclude … Continue Reading

CMS Stark Advisory Opinion Rejects Amendment of Recruitment Agreement

CMS ISSUES STARK ADVISORY OPINION PROHIBITING  AMENDMENT OF RECRUITMENT AGREEMENT On October 3, 2007, the Centers for Medicare and Medicaid Services (CMS) issued Advisory Opinion CMS – AO – 2007 – 01 denying permission to the hospital and physician to revise a physician recruitment agreement. The proposed amendment would have deleted and “excess receipts provision, which … Continue Reading

OIG Advisory Opinion: Pay for Call Coverage Approved

OIG ADVISORY OPINION 07-10 APPROVES CALL PAY On September 27, 2007, the Office of the Inspector General of the Department of Health and Human Services posted OIG Advisory Opinion No. 07-10 which approves a tax exempt hospital proposal for compensating physicians for on call coverage. While acknowledging that on call compensation potentially creates considerable risk that … Continue Reading

CMS Issues Final Stark III Regulations

CMS Issues Final Stark Phase III Regulations Stark Phase III Regulations On August 27, 2007, the Centers for Medicare and Medicaid Services (CMS) placed on display at the Office of the Federal Register a final rule on physician "self-referral" of Medicare beneficiaries for certain types of Medicare-covered services. The rule is commonly known as "Stark … Continue Reading

Pete Stark Proposes Elimination of Whole Hospital Ownership Exception

Congressman Pete Stark has proposed a new piece to the Stark legislation which would eliminate the existing “whole hospital” exception for a physician ownership by inserting a provision into H.R. 3162, the Children’s Health and Medicare Protection Act, which would impose new hospital disclosure requirements and new physician ownership limitations. The text of the provision follows … Continue Reading

CMS Proposes to Close Stark Loopholes

CMS has issued regulations within the intent of closing what it perceives to be loopholes in the Stark regulations. The major initiatives are as follows: 1.         The definition of the term “entity” will be expanded to include both sole practitioners as well as other types of entities. The definition will state that an entity will include a … Continue Reading