Feds file Stark Law complaint against Indiana health network

January 10, 2020

Community Health Network Inc. faces allegations for illegally billing Medicare for services provided by physicians with whom it has a financial relationship.

An Indiana health network is facing a Stark Law complaint from the federal government claiming they improperly billed Medicare, according to a news release from the U.S. Justice Department.

Community Health Network Inc. is an integrated healthcare system in central Indiana. It stands accused of billing Medicare for patients referred by doctors with which the system had financial relationships that did not meet any statutory or regulatory exceptions as numerated in the Stark Law. These relationships involved Community Health Network paying the physicians well above fair market value and basing bonuses on the physicians’ bringing a minimum target of referral revenue to the hospital, the release said.

“Improper financial relationships between hospitals and physicians corrupt clinical decision-making, threaten patient care, and ultimately drive up Medicare costs,” says Assistant Attorney General Jody Hunt, of the Department of Justice’s Civil Division, in the release.  “We are committed to eliminating these improper inducements and thereby ensuring the Medicare program remains fiscally sound to serve our nation’s senior citizens.”

The Stark Law was implemented in 1989 and seeks to ensure that decisions concerning healthcare are not influenced by the desire for profits. It bans physicians from making referrals for health services paid by Medicare to an entity they have a financial interest in, unless it falls under one of many exceptions.

President Donald J. Trump’s administration has sought to expand the number of exceptions as they move Medicare to a valued-based model instead of the fee-for-service model which has dominated the program.

Despite this expansion of exceptions, several large hospital chains have recently been hit with large cash penalties for violating the law including a $46 million penalty which was levied against Sutter Health.

“Our goal at the U.S. Attorney’s Office is to serve the citizens and help ensure safety in their communities,” the release quotes U.S. Attorney for the Southern District of Indiana Josh Minkler as saying.  “Hospitals are responsible for not only the health and well-being of their patients, but are also required to establish a compliance program in order to protect against improper payments, fraud and abuse as a condition of enrollment in the Medicare program.”

The case against Community Health Network is being tried by the Justice Department’s Civil Division and the United States Attorney’s Office for the Southern District of Indiana, with assistance from the Office of Inspector General of the Department of Health and Human Services, according to the release.