The United States therefore could not have lawfully paid Halifax if it had been apprised of the financial relationship between Halifax and the neurosurgeons and Medical Oncologists. 42 U.S.C. § 1395nn(a)(1). In addition, Halifax was unjustly enriched in the amount of the Medicare reimbursements paid by the United States for DHS ordered by these physicians.

31 U.S.C. § 3729(a)(1)(G). Halifax’s obligation to make restitution to the government once it learned of the Stark Law violations at issue arose under: (1) the Stark Law itself, 42 U.S.C. § 1395nn(g)(2), which requires Medicare providers to “refund on a timely basis” any amounts billed in violation of the statute; and (2) the regulations implementing the Stark Law, 42 C.F.R. § 411.353, which require Case 6:09-cv-01002-GAP-TBS Document 272 Filed 05/28/13 Page 35 of 41 PageID 10801 36 that any entity collecting payment for a health care service “performed under a prohibited referral must refund all collected amounts on a timely basis.”

at 937 (emphasis added). As support, the Court cited only the Stark Law itself, 42 US.c. § 1395nn(a). See id.

A “referral” is defined as “the request or establishment of a plan of care by a physician which includes the provision of designated health services.” 42 U.S.C. § 1395nn(h)(5)(A). The accompanying regulations interpreting the statute also broadly define “referral” as, among other things, “a request by a physician that includes the provision of any designated health service for which payment may be made under Medicare, the establishment of a plan of care by a physician that includes the provision of such a designated health service, or the certifying or recertifying of the need for such a designated health service . . . .” 42 C.F.R § 411.351. A referring physician is defined in the same regulation as “a physician who makes a referral as defined in this section or who directs another person or entity to make a referral or who controls referrals made to another person or entity.” Id. B. The United States Properly Alleges Violation of the Stark Statute Under the Stark statute, the United States has the burden of establishing a financial relationship between the physician making referrals and the entity performing the DHS. See United States ex rel. Kosenke

The Stark Law and regulations make clear that Halifax was not entitled to receive Medicare funds for any claims filed in violation of the Stark Law, and that Halifax is required to refund any money it improperly received, regardless of whether Halifax provided services. 42 U.S.C. §§ 1395nn(a)(1), (g)(1); 42 C.F.R. § 353(d); Tuomey, 675 F.3d at 397-98. This condition was reiterated in the Provider Agreement Halifax signed and certified.

42 U.S.C. § 1320a-7b(b). Stark, on the other hand, regulates financial relationships between referring physicians and entities that furnish designated health services (“DHS”), regardless of the parties’ intent. Under Stark, absent an applicable exception, physicians are prohibited from referring Medicare patients for DHS to any entity with which the physician (or immediate family member) has a “financial relationship” and the DHS entity is prohibited from billing for DHS furnished pursuant to such physician’s referrals. See 42 U.S.C. § 1395nn(a); see also United States ex rel. Drakeford v. Tuomey, 792 F.3d 364, 373–74 (4th Cir. 2015); Parikh, 977 F. Supp. 2d at 663. For a Stark violation to serve as a predicate FCA violation, the SAJC must allege the existence of a “financial relationship” between a DHS entity and White.

Instead, it simply lumps in the Sham Loan, Equity and Rent Scheme and the Payola Scheme allegations as though they are self- proving Stark violations (which they aren’t since the SAJC fails to identify any referrals for DHS by a physician to or from any entity in while Kumar had a financial interest). Moreover, once again, the SAJC merely states in a conclusory fashion that Defendants violated the Stark law by “giving or accepting self-interested referrals”48 without identifying any claim that Kumar or an affiliated entity presented to an individual, third-party payor, or other entity for a DHS. As such, it is completely devoid of any substantive allegations that could form the basis of a Stark law violation. 46 42 U.S.C. §1395nn(a)(1)-(b) provides, in relevant part, that: Except as provided in subsection (b) of this section, if a physician (or an immediate family member of such physician) has a financial relationship with an entity specified in paragraph (2), then— (A) the physician may not make a referral to the entity for the furnishing of designated health services for which payment otherwise may be made under this subchapter, and (B) the entity may not present or cause to be presented a claim under this subchapter or bill to any individual, third party payor, or other entity for designated health services furnished pursuant to a referral prohibited under subparagraph (A).

Yet the statute makes clear that there is no “review . . . of the process under this paragraph (including the establishment of such process).” 42 U.S.C. § 1395nn(i)(3)(I) (emphasis added). Thus, while review of the regulations that establish the process is plainly unavailable, per the final phrase, that cannot be the only thing that is barred.

The Stark Statute specifies that no claim for any service provided pursuant to a tainted referral may be submitted to, or paid by Medicare, even if the service would otherwise be payable by Medicare. 42 U.S.C. §1395nn(a)(1)(A). Likewise, the question of medical necessity has no bearing on the applicability of the False Claims Act or of Section 1396b(s).

See TRW, Inc. v. Andrews, 534 U.S. 19, 31 (2001) (statutes are to be 5 This provision provides in pertinent part: “[N]o payment shall be made to a State under this section [Medicaid] for expenditures for medical assistance under the State plan consisting of a designated health service (as defined in [42 U.S.C. §1395nn(h)(6)]) furnished to an individual on the basis of a referral that would result in the denial of payment for service under title XVIII of this chapter [Medicare] if such title provided for coverage of such service to the same extent and under the same terms and conditions as under the State plan. . . .” 42 U.S.C. § 1396b(s) (emphasis added). Case 8:11-cv-01687-JDW-EAJ Document 34 Filed 01/10/13