Becker’s reported on six Stark law cases in 2025:
1. New York-Presbyterian Hudson Valley Hospital will pay $6.8 million to settle allegations that it improperly paid a Westchester, N.Y.-based oncology practice to induce referrals that were then billed to Medicare and Medicaid. The complaint alleges that between 2011 and 2012, the hospital entered into three contracts with the oncology practice. Under the agreements, the hospital would pay the practice hundreds of thousands of dollars per year for work tied to several proposed initiatives, including planning for a melanoma center, planning for a breast cancer center and developing an intraoperative radiation therapy service line.
2. A federal district court in Ohio has refused to dismiss two whistleblower lawsuits accusing TriHealth of violating the Stark law, Anti‑Kickback Statute and False Claims Act. In one of the lawsuits — Murphy v. TriHealth — whistleblowers allege that TriHealth paid physicians well above their actual productivity, not for services performed, but because of the lucrative downstream referrals they generated. Although this created operational losses for the physician group, TriHealth and its hospitals compensated for them and profited, leading the District Court Judge Douglas Cole to describe the arrangement as “managing up the return, rather than managing down the loss.” The second suit — United States ex rel. Shahbabian v. TriHealth — involves Set Shahbabian, MD, whose neurosurgery practice was acquired by TriHealth. Dr. Shahbabian claims he was ousted and his patients were redirected to another high‑referral practice under alleged coercion and threats of reporting to medical boards.
According to a blog post from Warner Norcross + Judd, the court ruled that both whistleblowers had stated plausible false claims grounded in AKS and Stark violations. TriHealth could not invoke any applicable safe harbor or exception, including the employment exception under AKS. Additionally, the court rejected TriHealth’s intra‑corporate conspiracy defense, reasoning that physicians who coerced referrals acted beyond the scope of their employment.
3. Buffalo, N.Y.-based Catholic Health System agreed to pay more than $3.29 million to settle allegations that it submitted false Medicare claims in violation of the Stark law. According to the Justice Department, Catholic Health System had improper financial arrangements with non-employee physicians who referred services to CHS, which then billed Medicare for those services. The Justice Department said these compensation agreements did not meet Stark law exceptions because they were either not commercially reasonable or exceeded fair market value.
4. Gulfcoast Eye Care, operating under the name Pinellas Eye Care, agreed to pay $615,000 to resolve allegations of violating the Stark Law and the False Claims Act. Federal investigators claimed that the practice maintained a financial arrangement with a third-party provider that incentivized physicians to refer patients for diagnostic procedures — notably, transcranial Doppler (TCD) ultrasounds. Physicians allegedly received financial benefits tied to the volume of unnecessary TCDs ordered, which were then billed to Medicare and Medicaid. The compensation structure was reportedly based on the volume or value of these referrals, in breach of federal regulations.
5. Community Health System, along with its affiliated management company, Physician Network Advantage (PNA), agreed to pay $31.5 million to settle widespread violations of the Stark Law. According to federal authorities, CHS leveraged PNA to provide financial and other benefits to local physicians as an inducement for patient referrals to CHS hospitals, including Community Regional Medical Center and Clovis Community Medical Center. These arrangements were deemed improper and in violation of federal prohibitions against compensation linked to referral volume.
6. Northwest Anesthesiology and Pain Services reached a settlement over allegations that it violated the Stark Law and the False Claims Act by accepting improper bonus payments. Between January 2019 and December 2021, the group allegedly received approximately $1.8 million in bonuses tied to services billed to Medicare by independent pain management practices. The arrangement failed to meet federal criteria for lawful compensation structures.
