A Hospital In South Dakota has agreed to a $6 million settlement of a false claims suit based on a violation of the Stark Law. The Stark Law prohibits Medicare and Medicaid patient referrals by a physician to entities, including hospitals, when the physician and entity have a financial relationship that does not qualify for an exception. The qui tam action, joined by the government, alleged that the hospital leased space in its cancer center to an oncology group, thereby establishing a financial relationship, that did not meet a Stark Law exception because the rent paid by the group was below market and the written lease between the parties had expired several years prior to the filing of the suit. The suit further alleged that the claims submitted by the hospital as a result of the illegal referrals by the physicians constituted false claims. The settlement is the largest known settlement to date of a false claims suit based on a Stark Law violation. The oncology group also agreed to a $525,000 settlement based on alleged overpayments for office visits.

This material is not intended to create, and does not create, an attorney-client relationship between you and Vinson & Elkins L.L.P., and you should not act or rely on any of this information. As legal advice must be tailored to the specific circumstances of each case, nothing provided herein should be used as a substitute for advice of competent counsel. These materials do not constitute legal advice, do not necessarily reflect the opinions of Vinson & Elkins L.L.P. or any of its attorneys or clients, and are not guaranteed to be correct, complete, or up-to-date. Vinson & Elkins L.L.P. assumes no liability for the use or interpretation of information contained herein. This publication is provided "AS IS" WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. Unless otherwise indicated, V&E attorneys listed are: not Certified by the Texas Board of Legal Specialization. None of the attorneys listed on this website is certified as an "expert" or "specialist" pursuant to any authority governing the practice of law in New York.

Vinson & Elkins is a registered limited liability partnership. Principal office-Houston.