Stark law violators facing massive penalties 

Some of the largest recoveries by the Justice Department in the last year were Stark law violations, according to a Feb. 8 report from law firm Mintz, which could mean the law could be enforced more strictly moving forward.

Here are four major Stark law cases from 2023, according to the report:

1. In December, Indianapolis-based Community Health agreed to pay $345 million to resolve allegations it violated Stark law. The suit alleges the health system gave appraisers false information, doubled physicians' salaries based on what they earned in private practice and ignored warnings about disconnects between high compensation of physicians and productivity. 

2. Also in December, Dallas-based Steward Health Care System, Steward Medical Group and Steward St. Elizabeth's Medical Center in Boston were accused of receiving more than $4.8 million in improper incentive-based compensation based on referrals. This case is in the early stages, the report said, "but the outcome may help shape DOJ's approach to investigating and alleging Stark law-based [False Claims Act] theories of liability against healthcare entities."

3. In October, Oakbrook Terrace, Ill.-based Cardiac Imaging and its CEO agreed to pay more than $85 million to settle allegations they paid referring cardiologists excessive fees to supervise PET scans. The company allegedly paid referring cardiologists $500 per hour to supervise the tests, but they were treating other patients at the same time. 

4. In March, Saginaw, Mich.-based Covenant Healthcare System and two physicians paid more than $69 million to resolve claims they had improper financial relationships with eight physicians and a physician-owned investment group. The parties also allegedly submitted false claims to Medicare, Medicaid, Tricare and the Federal Employees' Compensation Act program. 

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