A Columbia, S.C.-based family practice faced an enforcement double-whammy when a whistleblower suit that alleged violations of the False Claims Act grew into allegations that it had also violated the Stark physician self-referral rule. Now the multi-location practice, its CEO and its former lab director
will pay more than $1 million and enter a corporate integrity agreement to resolve the case.
Family Medicine Centers of South Carolina LLC (FMC), has agreed to pay the United States $1.56 million, and FMC’s principal owner and former chief executive officer, Dr. Stephen F. Serbin, and its former Laboratory Director, Victoria Serbin, have agreed to pay $443,000 to resolve a False Claims Act lawsuit alleging that they submitted and caused the submission of false claims to the Medicare and TRICARE programs.
According to the Department of Justice (DOJ), FMC violated Stark by incentivizing doctors to order tests and other services that were performed by FMC.
In this case, the government alleged that the Stark Law was violated by FMC’s incentive compensation plan that paid FMC’s physicians a percentage of the value of laboratory and other diagnostic tests that they personally ordered through FMC, which FMC then billed to Medicare. Dr. Serbin, FMC’s co-owner and chief executive, allegedly initiated this program and reminded FMC’s physicians that they needed to order tests and other services through FMC in order to increase FMC’s profits and to ensure that their take-home pay remained in the upper level nationwide for family practice doctors.
Stark forbids providers from "billing Medicare for certain services ordered by physicians who have a financial relationship with the entity," the DOJ notes.
Medicare maintains the list of designated health services -- you may see them referred to as DHS -- and updates it every year in the physician fee schedule.
But there was more. According to the DOJ, the practice violated the False Claims Act by billing for medically unnecessary lab services
...by creating custom laboratory panels comprised of diagnostic tests not appropriate for routine measurement, performing these tests without an order from the treating physician, implementing standing orders to assure these custom panels were performed with defined frequency and not in reaction to clinical need, and programming FMC’s billing software to systematically change certain billing codes for laboratory tests to ensure payment by Medicare.
Stark has been around since 1990 and chiefly a concern for hospitals. However, it seems investigators have recently increased their use of this tool, and no wonder -- the maximum per-claim penalty is high: $15,000. And because Stark is not an intent-based law an investigator only has to demonstrate that claims violated the law.