Examining Referral Earning and Statutes in Healthcare: A Case Study

This case study examines the legal and ethical implications of referral earning in a healthcare setting, focusing on an orthopedic surgeon who provides gifts to referring physicians. The analysis highlights the Anti-Kickback Statute and Stark Law, which prohibit offering or receiving financial incentives for referrals and prevent physicians from profiting inappropriately from referrals, respectively. The role of a risk management head is discussed, emphasizing the importance of investigating unauthorized practices, assessing potential safe harbor protections, and enforcing penalties for violations. The study also recommends implementing stronger administrative oversight, educating employees about compliance, and exploring alternative revenue streams such as scientific research. Desklib provides access to similar case studies and solved assignments for students.

Running head: REFERRAL EARNING AND STATUTES
REFERRAL EARNING AND STATUTES
Name of Student
Name of University
Author note

1REFERRAL EARNING AND STATUTES
Government funded healthcare programs are created to assist low socioeconomic
groups for achieving high health care services. These funded programs are delivered through
healthcare providers who needs to comply with the hefty government regulations. Dr. Stevens
has been receiving patients through referrals from primary healthcare providers for which the
orthopedic surgeon has been sending Christmas gifts to them for last 3 years to maintain the
good referral relationship.
This act is illegal because inducing or receiving referrals are strictly prohibited by
united state healthcare laws. To avoid filed by the Anti-Kickback Statute, hospital needs to
ascertain that its relationship with physicians is not certainly a route to pay their ‘top’
physicians for bringing in more and more referrals (Fields 2019). The statute strictly prohibits
any act of offering and receiving financial payments through referrals. Stark Law prevents
physicians from profiting inappropriately from the referrals. As a risk management head, my
duty is to prohibit such practices. I would be asking Dr. Stevens the causes and duration of
his unauthorized practice, who else in the hospital are involved in such referral earning acts.
Dr. Stevens’s case should be further investigated if he can be protected by ‘safe
harbor’. Otherwise he shall face a severe penalty of or up to $50,000 for every kickback and
three times of the remuneration, under the statutory laws of CMPL (Office of Inspector
General 2019). For reformation of course, I would advise the hospital to have a stronger
administrative team and policy to monitor these potential acts and they can even focus on
science research to earn revenue in a genuine way rather than by referrals. The employees of
the hospital must be educated and made aware of the criminal punishments and potential
financial loss subjected to the malpractice offences. Any knowledge of these referral
practices must be immediately reported.

2REFERRAL EARNING AND STATUTES
References
Fields, L. 2019. 13 Legal Issues for Hospitals and Health Systems: Here are 13 legal issues
affecting hospitals and health systems in 2011. 1) Lawsuits against the mandate to buy health
insurance. Since Congress is unlikely to repeal healthcare reform in the face of. [online]
Beckershospitalreview.com. Available at: https://www.beckershospitalreview.com/hospital-
management-administration/13-legal-issues-for-hospitals-and-health-systems.html
Office of Inspector General, D. 2019. Fraud & Abuse Laws | Physician Roadmap |
Compliance | Office of Inspector General | U.S. Department of Health and Human Services.
[online] Oig.hhs.gov. Available at:
https://oig.hhs.gov/compliance/physician-education/01laws.asp