$50 Million Stark Settlement Shows Risk of Violation, Whistleblowers

An article in the November issue of Healthcare Risk Management, “$50 Million Stark Settlement Shows Risk of Violation, Whistleblowers,” discussed Wheeling Hospital’s $50 million settlement with the U.S. Department of Justice (DOJ) that resolved a whistleblower complaint filed in 2017 by a former executive of the hospital. Rivkin Radler’s Jeff Kaiser was quoted in the article.

According to the DOJ’s press release announcing the settlement, the West Virginia hospital allegedly violated the Stark Law and federal Anti-Kickback Statute from 2007 to 2020 by paying improper compensation to referring physicians based on their referrals of patients to the hospital. The hospital’s submissions of claims to the Medicare program that resulted from these violations, in turn, violated the False Claims Act.

In the article, Jeff noted that under both statutes, financial relationships must be commercially reasonable and fair market value without taking into account the volume or value of referrals. “A hospital may not pay excessive compensation to its physicians as an incentive for patient referrals without risking liability under these laws,” he concluded.