Stark law compliance remains a high-stakes issue for healthcare organizations.
Here are three settlements that physicians and ASC leaders should be aware of:
1. Gulfcoast Eye Care, operating as Pinellas Eye Care in Florida, agreed to pay $615,000 to resolve allegations of Stark law and False Claims Act violations. Federal authorities alleged that the practice had a compensation arrangement with a third-party provider that created a financial incentive to refer patients for diagnostic tests — specifically, transcranial Doppler ultrasounds. Physicians were accused of financially benefiting from high volumes of unnecessary TCDs, which were then billed to Medicare and Medicaid. The arrangement allegedly tied compensation to the volume or value of referrals.
2. Community Health System in Fresno, Calif., along with its affiliated physician management company, Physician Network Advantage, agreed to a $31.5 million settlement to resolve systemic Stark law violations. According to the federal complaint, CHS used PNA to offer valuable benefits to community physicians, including financial perks, in exchange for patient referrals to CHS facilities such as Community Regional Medical Center and Clovis Community Medical Center. The arrangement was deemed an improper inducement, in violation of federal law prohibiting financial relationships tied to referrals.
3. Houston-based Northwest Anesthesiology and Pain Services agreed to settle claims it violated the Stark law and False Claims Act. Between January 2019 and December 2021, the group allegedly received approximately $1.8 million in improper bonus payments. These were linked to services billed to Medicare by independently contracted pain management practices — an arrangement that did not meet federal standards for permissible compensation.
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