Court rules hospital violated Stark Law

On January 21, 2009, the U.S. Court of Appeals for the Third Circuit released its opinion in an important case regarding the meaning of the Stark Law, U.S. ex rel. Kosenske vs. Carlisle HMA, Inc., No. 07-4616. The case was before the court after a grant of summary judgment in favor of the defendants by the District Court on the alleged Stark Law violation, and the unanimous court reversed and remanded the case for further proceedings. Both courts held that the grant of exclusive privileges by a hospital to an anesthesiology group (including the use of hospital-owned facilities and equipment associated with the privileges) could create in-kind remuneration sufficient to constitute a financial relationship under the Stark Law. The courts also held that, under the undisputed facts in the case, the hospital had received referrals when anesthesiologists treated pain management patients who were hospital outpatients, using a facility that was separate from the main hospital facility. The Circuit court disagreed, however, with the District Court's holding that the arrangement satisfied the personal services exception in the Stark Law.

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