The main federal laws
Several federal laws work together. The False Claims Act creates civil liability for knowingly submitting false claims to Medicare, Medicaid, and other federal programs. The Anti-Kickback Statute makes it a crime to knowingly and willfully offer or pay anything of value to induce referrals of federally reimbursed business, and the same applies to the person who asks for or accepts it; claims resulting from a violation are treated as false. The physician self-referral law, often called the Stark Law, restricts physicians from referring certain services to entities with which they have a financial relationship unless an exception applies, and its basic payment prohibition applies regardless of intent. The HHS Office of Inspector General can impose civil monetary penalties and exclude providers from federal programs, and criminal health care fraud statutes apply on top of these.
Where providers get into trouble
Many problems arise from arrangements rather than claims: compensation that tracks referrals, rent or services priced away from fair market value, free staff or items given to referral sources, and marketing payments based on volume. Safe harbors and exceptions protect many common arrangements, but they generally require written terms and other conditions that must actually be met, not just approximated. Billing problems, such as coding at a higher level than the record supports, are the other main source. New York adds its own enforcement through the Office of the Medicaid Inspector General and the Attorney General's Medicaid fraud unit. State laws and private insurers can reach some conduct even when no federal program pays.
Reviewing an arrangement or a concern
When we first meet, we look at the arrangement or billing practice in question, who refers to whom, how money flows, and which programs pay for the services. For a proposed arrangement, we compare its terms with the applicable safe harbor or exception and identify what needs to change. For past conduct, we discuss whether an internal review, a refund of overpayments, or a self-disclosure through an OIG or CMS protocol is worth considering, since identified overpayments must be returned within a set period. Records should be preserved and left unedited once a concern is raised.
