Due to the sensitive nature of healthcare services, their business component is under heightened scrutiny by the federal government. While quid-pro-quo is a common practice in many industries, healthcare laws strictly prohibit this age-old practice.

Two federal statutes, the Stark Law and Anti-Kickback Statutes, explicitly forbid direct compensation for patient referrals in Charleston. While both regulations aim to limit cost and eliminate corruption in medical decision-making, they are inherently different.

What Are Anti-Kickback Statutes?

The Anti-Kickback Statute (AKS) (42 U.S.C. §1320a-7b(b)) is a criminal statute that forbids transactions meant to reward or induce referrals for services or items reimbursable by federal healthcare programs. At its core, the AKS is an anti-corruption statute meant to eliminate money’s influence on referral decisions affecting federal healthcare program beneficiaries. It guards against inflated costs, overutilization, and diminishing quality of service.

Anti-Kickback Statutes forbid anyone in Charleston from knowingly and willfully receiving, offering, making, or soliciting payment in return for referring anyone to any person or entity to provide items or services paid for by a federal healthcare program, or from arranging or recommending the purchase of a service that a federal healthcare program pays for. Kickbacks prohibited by AKS include discounted office space, offering financial incentives for referrals, or overcompensating medical directors. Waiving copayments in any form, case-by-case or routinely, is also prohibited.

However, some business arrangements are exempt and immune to this criminal statute. Known as safe harbors, these exceptions were ratified by congress and are directed by the Secretary of the Department of Health and Humans Services. Safe harbors specify which business arrangements are immune from AKS liabilities and do not constitute criminal or illegal activity.

What is Stark Law?

Also known as the “physician self-referral laws,” Stark Laws (42 U.S.C. §1395nn) govern a physician’s ability to refer Medicare or Medicaid patients. It prohibits physicians from referring Medicare or Medicaid patients to a facility that provides designated healthcare services (DHS) if the referring physician (or their immediate family member) has a financial interest in that facility.

Stark Laws bar DHS from collecting payments from Medicare or Medicaid for medical services rendered to a patient who came to them from a prohibited referral. Unlike AKS, which is a criminal statute, Stark Law is a civil statute. Violating Stark Law comes with far-reaching and expensive penalties in Charleston.

Notable Differences between AKS and Stark Law

AKS and Stark Laws differ in several ways. For example, AKS covers all government-funded healthcare programs, while Stark Law is limited to Medicaid and Medicare. In addition, only physicians can violate the Stark Law, whereas anyone can violate AKS.

The penalties for violating AKS versus violating Stark Laws are also different. Violation of Anti-Kickback Statutes include fines of up to $25,000, jail sentences of up to five years, and exclusion from Medicare and Medicaid programs. A violation of Stark Laws, on the other hand, can lead to:

  • Denial of payment to the DHS for the services rendered
  • Refunding of monies collected by the physician and the DHS facility
  • Civil penalties of up to $15,000 for each unlawful service provided
  • A 300 percent refund of the money unlawfully collected from the Medicare program
  • Exclusion from state healthcare programs, including Medicaid and Medicare
  • Civil penalties of up to $100,000 for each attempt to circumvent the law

In either case, legal counsel is strongly advised when dealing with AKS or Stark Laws in Charleston.

Don’t Take Chance with Anti-Kickback Statutes and Stark Law in Charleston

An attorney could help ensure that you never fall on the business end of Stark Law or Anti-Kickback Statute in Charleston. At Bill Nettles Law, a seasoned team of attorneys experienced in civil and criminal litigation helps physicians across South Carolina.

Besides helping you mount a skilled and spirited defense during legal proceedings, a lawyer could help you comply with the spirit of the law. Exceptional legal advice is available for physicians in the Charleston area, so call today to get started.

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