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Four Types of Transactions Most Affected by Self-Referral Laws

Four Types of Transactions Most Affected by Self-Referral Laws

WASHINGTON--Physicians and hospitals have good reason to learn
as much as possible about the expanded Stark self-referral law,
which went into effect last January, and federal anti-kickback
legislation. The penalties if convicted under these measures can
be large, and the federal government is committed to their enforcement.

In fact, Attorney General Janet Reno has stated that health-care
fraud is her department's number two initiative after violent
crime, Clifford D. Stromberg, Esq., said in his talk at the meeting
of the Association of Community Cancer Centers (ACCC).

Mr. Stromberg has served as deputy executive secretary of the
US Department of Health and Human Services and as a consultant
on health anti-trust issues for the Federal Trade Commission.
He is currently a partner in the Washington, DC, firm of Hogan
& Hartson.

The anti-kickback law prohibits referral arrangements in which
there is remuneration, meaning anything of value. "A variety
of safe harbors are provided, because otherwise the standards
would encompass virtually everything in the health-care system,"
Mr. Stromberg said.

The Stark self-referral law says basically two things: First,
a physician may not refer a patient to an entity with which the
physician or an immediate family member has a financial relationship,
which means either an investment interest or a compensation arrangement;
and second, a physician or anyone else cannot present for payment
any bill that arose out of a prohibited referral.

Selling a Medical Practice

Mr. Stromberg outlined four types of medical transactions that
are affected by these laws. The first is the acquisition of a
medical practice by a facility such as a hospital. "Obviously,
if there is a payment to a physician to acquire his or her practice,
then one could infer there is a payment to that person to refer
to that facility. For strategic reasons, oncology is a high target
because it is so multidisciplinary and feeds a lot of other services,"
he said.

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