On July 28th, 2016, the Department of Justice released a report stating that the Lexington County Health Services District will pay $17 million for violations of the Physician Self-Referral Law (the Stark Law) and the False Claims Act.
The Department alleged that Lexington Medical Center (“LMC”) violated the Stark Law (which prohibits physicians from referring Medicare beneficiaries to an entity in which the physicians have a financial relationship for designated health services) by providing financial incentives to 28 physicians in exchange for referrals. The physicians were purportedly provided compensation in excess of fair market value, with the volume or value of referrals taken into account. The False Claims Act (which, in pertinent part, imposes penalties on healthcare providers for submitting false claims to a government program) lawsuit was filed by whistleblower Dr. David Hammett, a former employee who claims he was fired for not providing enough referrals to LMC.
This False Claims Act case is one of many since 2009, through which the government has, in total, recovered more than $18.3 billion from healthcare agencies. The countless violations of the Stark Law alleged by the government in recent years have called into question the complexity and breadth of the law.