Government Continues to Scrutinize Physician Compensation Based on In-Practice Referrals

The Stark Law precludes cardiology medical practices from compensating physicians based on the volume or value of the doctors’ referrals for ancillary medical services, such as nuclear scans and CT scans.

This conduct was at the heart of a recent False Claims Act case, alleging that a New York based cardiology medical practice determined physician compensation based on referrals for in-house nuclear scans and CT scans. The medical practice agreed to pay the government $1.3 million.

When this settlement was announced, the attorney for the medical practice asserted that the compensation arrangement had now effect on the number or tests ordered or provided. However, medical necessity is not a defense to alleged Stark Law violations. In fact, Congress specifically drafted the Stark Law with strict liability language, so that the government could attach liability even when the medical services were medically necessary.

More information for whistleblowers is located at the Nolan Auerbach & White website.