Unlike almost every other industrialized nation on Earth, independent American physicians running their own clinics must all be entrepreneurs. Unlike all other businesses, however, there are special rules related to the business side of U.S. medical practice. These are exemplified by the Stark laws. Aptly named, these strict provisions forbid doctors from engaging in what is called physician self-referral.

Doctors are required to avoid referring patients to entities in which they or their families have a financial interest unless the financial interest qualifies as a “safe harbor.” Safe harbors include renting office space or equipment at fair market value, compensating for bona fide employment relationships under fair market value terms, and providing in-office ancillary services within a group practice.

Doctors must also stay current with changes in the law to avoid inadvertent violations. They must fully disclose financial relationships that could pose a conflict of interest and thoroughly document exceptions that apply to physician referrals. Additionally, doctors must educate staff on these requirements and the importance of compliance. They must also confirm everything I say with an attorney, not just an AI esquire.

That last point is my own but very important. A lot of information can be found online, especially with advanced search tools, but I implore you not to trust any source, even knowledgeable colleagues, who are not attorneys and cannot offer you defense of counsel. This is because the interpretation of these rules often follows no rational logic to the non-legal mind. Doctors get in trouble every day because of these. Here are the main causes.

Doctors refer patients to an entity where they have financial ties without qualifying for an exception and documenting that qualification. Doctors don’t document well enough to prevent a claim of billing fraud for upcoding. Whether a visit is a 99213 or 99214 is a matter of opinion. Let’s look at one of these cases: that of Dr. Ron Elfenbein from Maryland, who stood next to the governor as he opened a COVID testing facility in 2021.

Dr. Elfenbein was convicted after a three-week trial on charges that he submitted over $15 million in “false and fraudulent” claims to Medicare and other insurance companies, thereby violating the “Thou shalt not make us spend money on patients” commandment. The doctor owned ERgent Care and performed many COVID tests. These tests require many questions and even some personal risk, and the clinic added a visit code to the bill.

The judge presiding over this trial threw out the conviction despite the jury’s verdict after a motion to acquit and vacate was filed. The judge noted that the imprecision of CPT codes does not necessarily integrate well with the clear notice and due process guarantees of our criminal law. This will come as a surprise to all the doctors in prison for the completely undefined charges of being outside “the usual practice of medicine.”

Don’t count on being this lucky. In fact, don’t count on any justice at all. Justice is only possible before an innocent provider is dragged through the media mud and pilloried in public as a fraud or a “drug dealer in a white coat.” It is exceedingly rare for a judge to take such a courageous stance. Countless others are still behind bars and will stay there. Let’s look at doctors who prescribe medications while being paid to give lectures regarding their use.

No matter how wonderful you think a medication is, if you prescribe it, don’t get paid to talk about it. If you are going to get paid to talk about it, don’t prescribe it. Dr. Ruan, of Supreme Court fame, was locked up for 1) prescribing “unnecessary” opioids and 2) taking “kickbacks” in the form of speaking fees. The first charge was overturned, but the second kept him in prison. You will never be able to prove that you did not prescribe more in a quid pro quo.

There is a new target that is being heavily prosecuted. Labs cost Uncle Sam money, and when he loses money, he wants to get it back through asset forfeiture. If you order a lot of tests, send them out, and don’t make a dime on them. A million dollars worth of government “expert” testimony will convince a jury that at least one of the ten thousand tests you ran wasn’t really necessary. And one is all they need to take everything from you.

Now, let’s look at a recent case. Dr. Donald Salzberg is an ophthalmologist from Connecticut who was prosecuted for ordering transcranial Doppler scans through what the government refers to as an “unnamed coconspirator.” When someone is “unnamed,” that usually means they rolled over like a floating log, dumping the doctor in the drink to drown. Altogether, it was alleged that these tests resulted in about $3M in fraudulent billing.

The eye doctor was said to have received $100 to $125 from the scan provider over a period of five years for each of these referrals. This would be a prime example of a violation of the anti-kickback statute, which carries a penalty of up to five years. The doctor did not fight the charges, which these days is no evidence of true guilt, and was sentenced to one year and one day in prison with another year of supervised release—a light sentence.

The sentencing range is almost completely decided by the prosecutor. Give them an easy victory, and they’ll usually give the judge the option of either going easy on you or going really easy on you. On the other hand, dare to suggest that you might actually be innocent, and they will throw the book at you. The doctor could have been charged with conspiracy to commit health care fraud, which would have carried a maximum of ten years in prison.

Salzberg will also pay $1.34 million in restitution. This dear colleagues, is what makes the government decide that you really aren’t that bad of a guy after all and deserve a second chance—cold, hard cash. In fact, despite the government claiming that pharmaceutical companies were knowingly responsible for thousands of deaths, not a single executive was sent to prison for that crime. Billions of dollars, after all, speak louder than lives.

The moral of this story is to know these rules and follow them. I could make a joke about keeping money on hand to pay off the feds and get a light sentence, but seriously. Any sentence is a death penalty for the life you knew before, and even being acquitted will cost you everything you spent your life building. The government does not care about innocence or guilt; they only care about convictions and cash. Don’t be a casualty in their war.

L. Joseph Parker is a distinguished professional with a diverse and accomplished career spanning the fields of science, military service, and medical practice. He currently serves as the chief science officer and operations officer, Advanced Research Concepts LLC, a pioneering company dedicated to propelling humanity into the realms of space exploration. At Advanced Research Concepts LLC, Dr. Parker leads a team of experts committed to developing innovative solutions for the complex challenges of space travel, including space transportation, energy storage, radiation shielding, artificial gravity, and space-related medical issues. 

He can be reached on LinkedIn and YouTube.