Case Study: Healthcare Professionals and Stark Law Violations

This case study examines a scenario involving Dr. S and Dr. V, who leased a nuclear camera and subleased it to a hospital, resulting in potential violations of the Stark Law. The core issue revolves around whether their actions, including fixed pricing and the hospital's acceptance of their patient referrals, constitute a breach of the Anti-kickback statute and the Stark Law. The case references key legal precedents, including Singh M.D. v Bradford Regional Medical Centre and Drakeford, M.D. v. Tuomey Healthcare System, Incorporated, to clarify the prohibitions against financial relationships and compensation arrangements between physicians and healthcare entities. The analysis concludes that the doctors' actions, specifically the indirect financial relationship created by the sublease and hospital referrals, violate the Stark Law. Furthermore, it highlights the potential for False Claims Act (Qui Tam) actions in cases of healthcare fraud.

Running head: HEALTH CARE
Case study- Stark Law
Name of the student:
Name of the university:
Author note

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Table of Contents
Case study..................................................................................................................................2
Issue:.......................................................................................................................................2
Rule:.......................................................................................................................................2
Application:............................................................................................................................3
Conclusion:.............................................................................................................................3
Reference....................................................................................................................................4

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Case study
Issue:
The primary issue of the case is to determine whether the action done by Dr. S and
Dr. V has violated the provision of Stark Law or not.
Rule:
The main theme of the case is based on the provision of Anti-kickback statute and
Stark Law. According to the Anti-kickback statute, any medical practitioner is prohibited to
sale or sublease or receive remuneration for any medical instrument wilfully (Soiberman et
al., 2015, 5035-5035). The practitioner is also prohibited to refer a patient to any health
service provider from where they can acquire financial benefit. According to section 1320a-
7b (b) of Anti-kickback statute, any medical practitioner is prohibited by law if he receives or
pays cash for purchasing or leasing any health care program (Yugo, & Hesch, 2017, 16). It
has also been prescribed that the practitioner must not engage into these works wilfully.
In Singh M.D. v Bradford Regional Medical Centre 752 F.Supp.2d 602 (W.D.
Penn. 2010), it has been observed that if a physician refers a patient to certain institutions
with whom the physician is financially attached, it will be regarded as violation to the rule of
Stark Act.
In Drakeford, M.D. v. Tuomey Healthcare System, Incorporated 675 F.3d 394
(4th Cir. 2012), it has been held that compensation arrangement made between the medical
practitioner and the hospital is a direct violation to the rule of Stark Act.
Stark Act made certain prohibition to the practitioners to get engaged with an entity
or make a reference to an entity from where he or she can earn benefit. Additionally the
doctors are restricted to make compensation arrangements in the form of remuneration from

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any Medicare agency (Salcido & Rubin, 2016, 1566-1570). According to the law, a medical
practitioner is prohibited to sublease any medical instrument and earn money from that
instrument.
In Health Care sectors, if any fraud takes place, claim can be made in the form of
Qui Tam. If any person is liable to commit any misconduct, he will be held responsible under
the False Claims Act and the process of claim will be considered as Qui Tam action (Gray,
2015, 49, 415).
Application:
It has been learnt from the case that both the physicians have leased a nuclear
camera and subleased the same to the hospital with certain terms and conditions. However,
the fare of the medical instrument was fixed in nature. The hospital has allowed the
references made by those practitioners and certain remunerations have also given to them.
Therefore, a beneficiary relationship has been made in between the Doctors and the hospital
and this has attracted the provision of the Stark Act.
On the other hand, the sublease has created an indirect economical relationship
between the practitioners and the hospital as remunerations are being given by the hospital to
those doctors. In USA, a doctor is prohibited to make reference under the Anti-kickback
statute.
Conclusion:
The action done by Dr. S and Dr. V has violated the provision of Stark Law as an
indirect financial relationship has been made in between them and the hospital.

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Reference:
Gray, M. (2015). Loosen up: Breaking Free from Strict with Particularity Requirements
When Pleading Fraud for Qui Tam Actions Brought under the FCA. Creighton L.
Rev., 49, 415. Available online in http://heinonline.org/HOL/LandingPage?
handle=hein.journals/creigh49&div=18&id=&page=
Salcido, R., & Rubin, E. (2016). What Extrapolation Could Mean for Your Practice: A Legal
Overview of Statistical Sampling in Overpayment and False Claims Act
Cases. CHEST Journal, 149(6), 1566-1570. Available online at
http://journal.chestnet.org/article/S0012-3692(16)01256-3/fulltext
Soiberman, U., Kambhampati, S. P., Mishra, M. K., Yiu, S. C., Al Towerki, A. E., Stark, W.
J., & Kannan, R. M. (2015). Subconjunctival dendrimer-drug therapy for the
treatment of corneal inflammation. Investigative Ophthalmology & Visual
Science, 56(7), 5035-5035. Available online at
http://iovs.arvojournals.org/article.aspx?articleid=2335037
Yugo, M., & Hesch, J. (2017). Settlement Restrictions on False Claims Act (FCA) Qui Tam
Actions: A Strict Application of Law or a Waste of Judicial Resources. Liberty Law.,
16. Online available at http://heinonline.org/HOL/LandingPage?
handle=hein.journals/liblej2017&div=9&id=&page=