Hospital enters $85 million settlement for alleged Stark Law violations

Halifax Hospital agreed Monday, March 3, 2014, to settle a whistleblower case for alleged Stark Law violations with the U.S. Justice Department in the amount of $85 million — an amount so large it is more than twice the previous recors for hospital systems accused of Medicare fraud.  The Daytona Beach, Florida  hospital is accused of having paid kickbacks to cancer specialists and neurosurgeons in exchange for funneling their patients into the hospital for over a decade.

The purpose of the Stark Law is to eliminate financial incentives for over-utilization.  Thus, the Stark law seeks to protect the best interest of the patient by ensuring that doctors make treatment decisions based on the patient’s medical need rather than on personal financial interests.  Simply stated, the Stark Law prohibits hospitals from seeking reimbursement from federal health care programs, like Medicare, for claims originating from  referrals by physicians with whom the hospital has a financial relationship.

This case was initially brought by a whistleblower, while she was employed at Halifax hospital.  The government’s involvement in this case is part of the ongoing effort to combat health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative.

If you have a compensation arrangement that you would like to have reviewed by an attorney or any other related question, contact Rafael A. Gaitan, Esq. for a free initial consultation.  Mr. Gaitan regularly counsels health care provider on Stark, Anti-Kickback, patient brokering and other health care compliance issues.  Mr. Gaitan may be reached at 305.443.8900 or via e-mail at