Stark Law and False Claims Act Compliance in Physician Deals

April 20, 2026

False Claims Act Insights - Healthcare Compensation and Referrals: Avoiding Compliance Pitfalls in Physician Deals

Hal Katz, Jonathan Porter Husch Blackwell LLP + Follow Contact LinkedIn Facebook X ;) Embed Host Jonathan Porter welcomes Husch Blackwell’s Hal Katz back to the podcast to discuss best practices for structuring physician compensation arrangements and navigating the complex compliance landscape surrounding healthcare referrals. Fresh off presenting at the American Association of Orthopaedic Executives (AAOE) conference, Hal and Jonathan share insights on how healthcare organizations can align financial incentives while staying on the right side of Stark Law and False Claims Act requirements.

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Host Jonathan Porter welcomes Husch Blackwell’s Hal Katz back to the podcast to discuss best practices for structuring physician compensation arrangements and navigating the complex compliance landscape surrounding healthcare referrals. Fresh off presenting at the American Association of Orthopaedic Executives (AAOE) conference, Hal and Jonathan share insights on how healthcare organizations can align financial incentives while staying on the right side of Stark Law and False Claims Act requirements.

We begin by examining the spectrum of compliance violations in physician compensation arrangements, from blatant criminal schemes designed to “buy surgeries” through sham consulting contracts to more nuanced cases where well-intentioned financial teams make statements about downstream benefits that later appear in DOJ complaints. Hal discusses a recent DOJ Stark intervention against a Tennessee health system and provides practical guidance on what healthcare executives and compliance officers should and should not say during physician compensation discussions.

Next, we turn to the mechanics of how compensation is calculated, drawing lessons from major cases like Tuomey and a Florida hospital settlement where the formula itself included problematic metrics. Hal explains the risks of “black box” compensation arrangements and offers best practices for creating transparent, defensible methodologies that can withstand government scrutiny.

Our conversation then shifts to private equity investment in healthcare and the tension between financial realities and compliance requirements. We discuss industry terms like “leakage” and “keeping procedures,” examining how organizations can have honest conversations about referral patterns without crossing legal lines.

We close with actionable compliance recommendations. Hal outlines concrete steps that executives, compliance officers, and physician group leaders can take today to strengthen their guardrails and build sustainable, defensible business practices in an increasingly scrutinized industry. See less -

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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