Exceptions to Stark Law Violations

While Stark Law violations usually lead to allegations a medical practice, hospital, or health entity also violated the False Claims Act; whistleblowers do need to understand that Stark Law does provide for a number of exceptions. These exceptions are meant to cover situations where a physician or health practice is acting in the best interest of the patient.

Some of the approved exceptions include:

The exceptions generally require that:

  • The referral arrangement be placed in writing
  • That the referrals should not be based on the volume or amount of the referrals
  • That all services, products, and treatments be for fair market value
  • That the arrangement should have a specific time frame

Some of the authorized exceptions (for doctors and immediate family members) include:

  • Rental of office space
  • Equipment rental
  • Bona-fide employment relationships
  • Personal service arrangements
  • Physician incentive plans
  • Physician recruitment
  • “Isolated transactions. Isolated financial transactions, such as a one-time sale of property or a practice, if certain conditions are met can qualify for the exception.
  • Certain arrangements with hospitals. Remuneration provided by a hospital to a physician may be legitimate – if the remuneration does not relate, directly or indirectly, to the furnishing of Designated Health Service
  • Group practice arrangements with a hospital
  • Payments by a physician to a laboratory in exchange for the provision of clinical laboratory services
  • Bona fide charitable donations made by a physician
  • Nonmonetary compensation “in the form of items or services (not including cash or cash equivalents) that does not exceed an aggregate of $300 per calendar year, as adjusted for inflation,” provided certain conditions are met
  • Incidental benefits for medical staff
  • In-office ancillary services

If the referral does not meet one of the Stark Law exceptions, then whistleblowers should be able to pursue a False Claims Act case based on a violation of Stark Law. Whistleblowers should always consult with an experienced California whistleblower lawyer because many doctors and medical companies don’t fulfill all the requirements to qualify for an exception. For help filing any healthcare-related whistleblower claim, call the experienced quit am lawyers at Stephen A. Danz and Associations. You can reach us at 877-789-9707 or complete our online contact form to make an appointment.