False Claims Act & Stark (Self Referral) Laws
The False Claims Act (CMS link and Justice link) and Stark laws provide some of the harshest penalties physicians could face. Encountering a problem here could lead to both civil and criminal prosecution, resulting in multi-million dollar fines and years in prison due to (False Claims Act (FCA), the Anti-Kickback Statute (AKS), the Physician Self-Referral Law (Stark law), the Exclusion Authorities, and the Civil Monetary Penalties Law (CMPL)). Modifications to the laws over the years have made the penalties more severe, and any slight error in your documentation (such as failing to click the right box in your review of systems) can be used to argue your "claim" for payment from the government (certainly Medicare, and likely Medicaid as well) was "false," and this mistake on a few charts can be extrapolated and applied to all your Medicare billing when determining your fine. Fighting one of these cases is far more difficult than a standard malpractice case. These laws create the most danger in standard third party medicine. See this MLN Booklet about Avoiding Medicare Fraud & Abuse: A Roadmap for Physicians.
If you are still in the system and concerned about Stark law, then you would want to design your practice to land in one of the safe harbors prior to doing anything creative with practice ownership (here are more details). Here is another resource by Catherine Dunlay and Dennis Barry.
Fortunately for "pure" DPC physicians - you do NOT have to worry about some of the worst laws affecting the healthcare system! If you have opted out of Medicare and do not participate in Medicaid, you will not be billing the federal government through Tricare, the Veteran's Administration or a similar program then the False Claims Act and Stark Laws do not apply to you. On the other hand, physicians practicing in Concierge (double-dipping) models or in various hybrid DPC models where they continue to accept Medicare should be especially fearful of these regulations.
Subjecting your DPC practice to these federal requirements will stifle your creativity while adding to your liability. Consider the following examples:
What if you were a cash pay practice that wanted to offer "prompt pay discounts" or something similar? Not so fast if you take federal money!
False Claims Act cases -there are lots of scary examples, consider this case against Kindred Healthcare settled for $125 Million, but this is only a fraction of the nearly $6 Billion recovered in 2014.