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Potential consequences of a violation


Your client/employer ABC hospital enters into an agreement with Novarmints pharma company to participate in a drug study. To conduct the study at the hospital, ABC asks physician Dr. No to serve as the principal investigator to conduct the pharma study for ABC. Dr. No is not a hospital employee but is on staff at the hospital and does refer his patients for defined health services when hospitalization is necessary for treatment. As part of his contract negotiations with the hospital, Dr. No asks the hospital to pass along to him 50% of the contract fees that Novarmints has promised to ABC for conducting the study. Would Dr. No’s proposed split be lawful under the Stark law? Do any of the 35 exceptions apply and if so, which one(s)? Explain your answer using the readings. What could be the potential consequences of a violation?