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The shifting federal analysis of referral relationships in healthcare

Stacy Harper ( is a Partner at Spencer Fane LLP in the firm’s Overland Park, KS office.

The compliance analysis necessary to structure financial arrangements between potential healthcare referral sources and referral recipients has been complex for decades. Unlike other industries, healthcare organizations face a myriad of overlapping state and federal laws that restrict the financial relationships and associated referrals, each with their own definitions, triggers, intent, and exceptions or safe harbors.

At the federal level, these compliance obligations have typically applied only to financial relationships in which the referral source is referring patients where care will be reimbursed by a federal healthcare program. However, the implementation of the Eliminating Kickbacks in Recovery Act of 2018 (EKRA) and recent enforcement activity by the Department of Justice in the Forest Park Medical Center bribery case[1] are shifting the scope of the federal compliance obligations to include additional layers of federal and state laws, each applicable in the absence of reimbursement by federal healthcare programs.

As such, if a relationship with physicians or other referral sources has been structured to carve out federal healthcare program beneficiaries to avoid triggering federal law requirements, it is time to review its compliance.

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