Clinician liabilities for violating the AKS include potential prison terms and civil monetary penalties ($50,000 for each violation, damages up to 3 times the total amount of remuneration, and exclusion from federal healthcare programs).

The Stark law prohibits the referral of Medicare and Medicaid beneficiaries by a physician to an entity for the provision of designated health services if the physician or the physician’s immediate family member has a financial relationship (ie, ownership, investment, or compensation arrangement) with the entity.1

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Because the Stark law is a liability statute, no proof of bad intent is required to violate the law, meaning any arrangement that does not adhere to criteria for a statutorily defined Stark law exception is illegal. Penalties for violating the Stark law include $15,000 per violation or as much as $100,000 per violation if the offending party enters into a “scheme.”

In addition to the Stark law, some states have their own laws governing self-referral. In Florida, where Dr. Florete practices, the Florida Patient Self-Referral Act extends the provisions of the Stark law to all healthcare services, regardless of whether they will be paid by federal or private payers.

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Fee-splitting prohibition statutes exist in most states in the form of unethical or unprofessional conduct defined by state laws that govern the licensure of medical professionals.2 Such statutes generally prohibit healthcare providers from paying or receiving commissions, bonuses, kickbacks, or rebates; or engaging in any fee-splitting arrangements with another physician, person, organization, or agency for which a patient is referred for provision of healthcare goods or services.

The penalty for splitting fees generated from patient care consists of loss of license to practice.

“Expand your scope of services,” Dr. Florete advised. “We can no longer rely on our traditional sources of income. The viability of your practice may hinge on the use of nontraditional sources of revenue.”

Disclosures: Orlando G. Florete Jr., MD, receives consulting fees for Rego International and MD Medical Inc.


1. Fraud and Abuse Laws and Regulations. UCLA Health Office of Legal Affairs website. Available at: Accessed August 26, 2015.

2. Anderson JA, Hughes CB. Physician practice management arrangements: State fee-splitting prohibitions and the corporate practice of medicine. Compliance Today. January 2014. Available at:  Accessed August 26, 2015.