Allegations that Community Health Network Paid Doctors Above Fair Market Value and Rewarded Physician Referrals Survives Motion to Dismiss

This month the U.S. District Court for the Southern District of Indiana denied Community Health Network’s (“Community”) motion to dismiss the United States’ complaint-in-intervention alleging that Community submitted false claims based on underlying violations of the Stark Law. United States ex rel. Fischer v. Community Health Network, Inc., No. 14-cv-1215 (S.D. Ind.).  The complaint alleged that Community violated the Stark Law through physician compensation that exceeds fair market value (“FMV”) and is based on the volume or value of referrals.  The opinion is notable in concluding that even physician compensation at the 90th percentile of rates paid in the market can plausibly allege a financial relationship that is not FMV and thus violates the Stark Law.