Question 1

What are the Goals of the AKS, Stark, and FCA?

Accepted Answer

The AKS, Stark, and FCA act as a way of dealing with governmental waste. Congress passed these statutes to protect against overspending, fraud, and abuse.

Question 2

How do the AKS, Stark, and FCA Differ?

Accepted Answer

Although there are some important similarities, there are also key differences between the AKS, Stark, and FCA.

To start, the AKS covers a broad range of medical services, whereas Stark only applies to DHS. Stark defines DHS as any of a list of twelve items or services, including clinical laboratory services, physical therapy services, and outpatient prescription drugs.

Under the AKS, prohibited conduct must be made “willfully or knowingly” to be illegal. This means an individual must at least know what they are doing is wrong. The individual does not necessarily need to know that they are specifically violating the AKS, only that their conduct is generally improper.

Conversely, Stark is a strict liability law. This means that a provider can be completely unaware that their referral is improper and still face penalties. Further, Stark makes no differentiation between technical violations (like forgetting to sign a contract) with blatant, purposeful conduct that violates the law. This underscores the importance of a provider’s awareness of their obligations under Stark.

Like the AKS, the FCA prohibits an individual or entity from “knowingly” submitting a false claim, including deliberate indifference or reckless disregard.

Finally, both the AKS and the FCA apply to any individual or entity, physician or otherwise. Stark, on the other hand, applies to only physicians, their immediate family members, and health care entities.

Question 3

What Health Care Programs Do the AKS and Stark Apply To?

Accepted Answer

The AKS and Stark apply to medical providers who receive money through federal health care programs. The federal government has three major health care programs: Medicare, Medicaid, and Tricare.

Medicare is a federal program that provides health care to individuals who are at least 65 years old, or to individuals with certain disabilities. Medicare is further split into two types of coverage: Part A and Part B. Part A covers charges for services such as inpatient hospital stays. Part B covers outpatient charges that do not require an overnight stay at a hospital, such as doctors’ visits, lab work, MRIs, and CAT scans.

Medicaid is a federal and state program that provides health care to individuals and families with limited incomes.

Tricare is a federal program that provides health care to active duty military personnel, veterans, and their dependents.

Question 4

What are the AKS Safe Harbors?

Accepted Answer

Standing alone, the AKS would make it extremely difficult for anyone in the health care field to do business in the realm of federal health care programs. Fortunately, the Code of Federal Regulations provides for Safe Harbors. Safe Harbors allow for certain conduct that is otherwise prohibited by the AKS if certain conditions are met.

There are many Safe Harbors. Examples of common Safe Harbors include arrangements regarding the rent of office space or equipment, bona fide employment relationships, and certain types of service agreements. Each Safe Harbor has multiple elements. Every single element must be met to qualify for Safe Harbor protection. Even if only one element is not satisfied, an individual can be exposed to AKS enforcement and penalties. As such, Safe Harbors are the most complicated facet of the AKS. Therefore, it is essential for providers to retain the services of an experienced health care compliance attorney.

Question 5

What are Exceptions to the Stark Law?

Accepted Answer

Stark allows for exceptions. If a referral is structured to fit within an exception, a provider will be protected from Stark penalties. Examples include the rental of office space or equipment, referrals to labs that are part of the same group practice, and certain service contracts. As with AKS Safe Harbors, all Stark exceptions have multiple elements. To be protected by an exception, each specific element must be met. Providers who believe they qualify for such exceptions should seek the advice of an experienced health care compliance lawyer to ensure they have the proper strategy in place. Careful and complete compliance with federal regulations is a must.

Question 6

Who are FCA Whistleblowers?

Accepted Answer

FCA violations are often brought by “whistleblowers.” Whistleblowers can be any non-governmental entity or individual, including employees and competitors. Whistleblowers must be an “independent source,” meaning they must “have direct and independent knowledge of the information on which the allegations are based and voluntarily provide that information to the [g]overnment before bringing suit.” Whistleblowers may then bring a civil “qui tam” suit on behalf of the government where they may be entitled to 15% to 30% of the proceeds recovered from the lawsuit.

Question 7

What are the Penalties for a AKS Violation?

Accepted Answer

Violations of the AKS can result in substantial criminal penalties. These penalties apply to any party of a business arrangement. The Department of Justice (DOJ) enforces the criminal penalties of the AKS. The criminal penalties include fines of up to $100,000 and ten-years’ imprisonment.

Violations of the AKS may also result in civil penalties. The Office of the Inspector General (the “OIG”), a division of the Department of Health and Human Services (the “HHS”), enforces the civil penalties of the AKS. These civil penalties are adjusted each year for inflation. As of 2019, the civil penalties include fines up to $102,522.00.

Question 8

What are the Penalties for a Stark Violation?

Accepted Answer

While a violation of Stark will not result in criminal penalties, it could result in massive civil penalties. Both the referring physician and the health care entity could be liable for:

Up to a $100,000 penalty for each violation;
A refund of the fee collected by the provider that received the referral;
Exclusion from federal and state health care programs; and
Payment of fines of up to $15,000 for each service that a provider “knows or should know” is a Stark violation;
This list is non-exhaustive and may include other penalties that federal regulatory agencies deem appropriate.

Question 9

What are the Penalties for a FCA Violation?

Accepted Answer

FCA violations can result in both criminal and civil penalties.

Criminal penalties include fines and jailtime. Typically, when a whistleblower reports a violation, the DOJ investigates the report and decides whether to bring criminal charges against the alleged party.

Whistleblowers may also bring a civil suit on behalf of the government, which may result in fines ranging in the tens of thousands of dollars, plus triple the amount falsely paid to the infringing party.

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