Physician Liability and Qui Tam Cases under the Stark Law and AKS: A Discussion with Marlan Wilbanks, Esq.

Episode Date: June 29, 2022

In this episode of Stark Integrity, host Bob Wade (“Captain Integrity”) is joined by Marlan Wilbanks, Esq., a qui tam attorney, to discuss physician liability and the growing role of qui tam cases under the Stark Law and the Anti-Kickback Statute (AKS).

This episode provides a practical look at how enforcement actions develop—and how both physicians and organizations can find themselves at the center of significant liability.

“It Takes Two to Tango”

A central theme of this conversation is that liability under Stark and AKS is often shared.

As Bob and Marlan explain:

• Hospitals, health systems, and physicians are both part of the arrangement
• Financial relationships must be evaluated from both sides
• Compliance failures often involve mutual participation

This reinforces that responsibility does not sit solely with one party—both sides must ensure compliance.

The Role of Qui Tam Actions

At the heart of this episode is the concept of qui tam lawsuits under the False Claims Act (FCA).

These cases:

• Are typically brought by whistleblowers (relators)
• Allow private individuals to sue on behalf of the government
• Often lead to significant settlements or judgments

Qui tam actions have become one of the primary drivers of healthcare enforcement, especially in cases involving Stark and AKS violations.

When a Stark violation results in submitted claims to federal programs, it can trigger FCA liability, significantly raising the stakes.

Fair Market Value: “The Train Runs Both Ways”

One of the most important insights from Marlan Wilbanks is that fair market value (FMV) applies to both sides of the equation.

This means:

• Overcompensation can create risk
• Undervaluation or “free” resources can also create risk
• Both physicians and entities must ensure FMV compliance

As discussed, arrangements that fall outside FMV—especially when tied to referrals—are a common trigger for enforcement actions.

wRVU Risks and Compensation Design

This episode also highlights the risks associated with wRVU-based compensation models.

Marlan warns that organizations must be especially careful when:

• Setting compensation levels based on productivity
• Adjusting wRVU values or assumptions
• Structuring incentives that may indirectly reward referrals

Improperly calibrated models can lead to payments that exceed FMV, creating exposure under both Stark and the AKS.

“Free” Is Not Free

One of the more memorable takeaways from this discussion is that “free employees aren’t always free.”

Providing:

• Staff support
• Equipment
• Administrative resources

without proper valuation or documentation can be viewed as remuneration, potentially implicating Stark and AKS.

These arrangements must be carefully structured to ensure they are compliant and properly valued.

Why Enforcement Often Focuses on Entities

Marlan also explains why regulators have historically focused more on DHS entities (hospitals, systems, organizations) than individual physicians.

Key reasons include:

• Entities are typically the ones submitting claims
• They often have greater financial exposure
• They are viewed as responsible for structuring compliant arrangements

However, this does not mean physicians are immune—liability can extend to both parties, particularly in egregious cases.

How Qui Tam Attorneys Evaluate Cases

A unique aspect of this episode is insight into how qui tam attorneys assess potential cases.

Marlan shares that:

• Cases are often evaluated based on compensation structure and documentation
• Patterns of above-FMV payments or unusual arrangements raise red flags
• Internal inconsistencies or ignored warnings can be highly relevant

This perspective provides valuable insight into how compliance issues are identified and pursued.

Practical Takeaways

The central takeaway from this episode is that physician compensation arrangements carry significant enforcement risk if not carefully structured and monitored. Healthcare organizations should:

• Ensure compensation aligns with fair market value
• Carefully evaluate wRVU-based models
• Avoid providing undocumented or undervalued resources
• Understand that both parties share compliance responsibility
• Maintain strong documentation to defend arrangements

Final Thoughts

With insights from Marlan Wilbanks, this episode provides a real-world look at how Stark Law and AKS violations translate into False Claims Act exposure and qui tam litigation.

As enforcement continues to intensify, organizations must go beyond basic compliance and focus on defensibility. In today’s environment, it is not enough to believe an arrangement is compliant—you must be able to prove it.

Click here to listen to this Stark Integrity Podcast Episode:
https://podcasts.apple.com/us/podcast/physician-liability-and-qui-tam-cases-under-the-stark/id1588939373?i=1000566456370&l=fr-FR