By: Rob Harris
The United States Court of Appeals recently issued a decision that may be of interest to physicians, to attorneys who represent them, and to members of the public concerned about health care costs.
As the court described, a federal law, called the Stark statute, “prohibits doctors from referring Medicare patients to a hospital if those doctors have certain specified types of ‘financial relationships’ with that hospital… And, in turn, the Stark statute prohibits that same hospital from presenting claims for payment to Medicare for any medical services it rendered to such referred patients.”
Similarly, as the court explained, “the Anti-kickback statute prohibits a hospital from financially inducing a person to refer a Medicare patient… [by] knowingly ‘offer[ing] or pay[ing] any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person . . . to refer an individual [for medical services] for which payment may be made in whole or in part under a Federal health care program’ such as Medicare.”
In the case before the court, a senior employee of a large medical network claimed that the network “made payments to six neurosurgeons and provided a golf-trip benefit to four other doctors to induce them to refer, or to reward them for referring, Medicare patients to the Defendants’ Medical Center in Naples, Florida.” The claimant asserted that, following these enticements, referrals indeed were made.
According to the court, the “complaint … alleges that the Defendants flew several Naples, Florida doctors—at the Defendants’ expense and on Defendant HMA’s corporate jet—to an April 2008 golf tournament. The Defendants provided the doctors with free rental cars, tournament tickets, meals, and drinks. The Defendants ‘selected the physicians [for this 2008 trip] based on their ability and willingness to send patient referrals to HMA hospitals, particularly Collier Boulevard.’”…
“The Defendants provided the 2008 golf trip to ‘generat[e] patient referrals, including Medicare and Medicaid patients.” CEO Moebius described the golf trip as a ‘once in a lifetime business development tool’ for the Medical Center. Each flight had a single doctor and at least one hospital administrator, who discussed how the doctor could do additional business with HMA hospitals.”
The medical network moved to dismiss the claims against it, arguing that, even if the allegations were true, no viable cause of action had been asserted against it. For purposes of the motion to dismiss, the medical network acknowledged that “the 2008 golf-trip benefit provided to the doctors created financial-referral incentives in violation of the Stark and/or Anti-kickback statutes.”
However, the medical network argued that dismissal of the lawsuit was appropriate, because the complaint failed to allege “that the Defendants submitted or presented any false claim to the government for these referred patients or that the government paid any such claim.”
As the court explained, “healthcare providers do not violate the [law]simply by having a financial relationship with a doctor. Merely alleging a violation of the Stark and Anti-kickback statutes does not sufficiently state a claim It is the submission and payment of a false Medicare claim and false certification of compliance with the law that creates … liability. And the Defendants’ interim claims were not false unless those claims submitted or presented were for Medicare patients who had been (1) referred by one of the ten doctors and (2) treated by the Defendants.”
Based upon this standard, the Court of Appeals concluded that the claimant’s detailed familiarity with the medical network established a basis for the case to proceed regarding events that occurred when he was still employed. For the period following his termination of employment, however, he lacked sufficient information to assert viable claims.