Lab question

[anonymous]

I suspect a lab I am familiar with may be doing something illegal. The company purchases small hospitals that are in financial trouble. Then they begin running lab services for Drs through the hospitals and they charge more because they are a hospital.

Is this illegal?

 

[Constantine Cannon]

Under the Stark Law, 42 U.S.C. § 1395nn, “referrals” are limited to certain types of medical services, such as lab testing, hospital services, prescription drugs, and durable medical equipment, defined as “designated health services.” In addition, the Stark Law applies only to relationships with physicians. The Stark Law, unlike the Anti-Kickback Statute, flatly prohibits a broad range of financial relationships, and does not require proof of an intent to induce referrals. Determining whether a particular financial relationship runs afoul of the Stark Law, however, can be more technically complicated.

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