Physician Law Blog

On April 17, 2015, the Health Care Fraud Prevention and Enforcement Action Team (HEAT) reported three new actions involving Medicare fraud and abuse. Since the Medicare Fraud Strike Force began in March 2007, HEAT has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5B.

The OIG has made it clear that laboratory payments to referring physicians are suspect as another False Claims Act (FCA) settlement was announced. The $48.5M settlement involves Health Diagnostics Laboratory, Inc. (HDL) and Singulex Inc. and resolves allegations they violated the FCA by paying remuneration to physicians in exchange for patient referrals and billing federal health care programs for medically unnecessary testing. Allegedly HDL and Singulex induced physicians to refer patients to them for blood tests by paying them processing and handling fees between $10 and $17 per referral and routinely waiving patient co-pays and deductibles.

Hospitals and physicians need to be alert when entering management agreements to ensure that the relationships require sufficient bonafide services to justify those management agreements. In this latest case, allegations related to violations of Stark Statute and Anti-Kickback Statute led to significant penalty payments, Ten Million Dollars. Hospitals and physicians need to ensure that any management service agreements they enter do not violate the Stark Statute and/or Anti-Kickback Statute.

On February 10, 2015, the Seventh Court of Appeals decided the matter of U.S. v. Kamal Patel, No. 14-2607, upholding the conviction of a physician for violating the anti-kickback statute.