Becker's ASC Review

8 ASC MANAGEMENT Stark law and clinic acquisitions: 10 takeaways By Patsy Newitt S tark law due diligence in clinic acquisitions must include meticulous evaluation of physician ownership and compensation to prevent self-referrals, according to a blog post from attorney Aaron Hall. Here are 10 things to know about Stark law compliance and clinic acquisitions: 1. Determine whether the clinic provides DHS, such as clinical lab testing, radiology or physical therapy. is is the first step in identifying potential Stark law implications, according to the post. Only services that fall under the DHS definition trigger the law's referral prohibitions. 2. Examine all direct and indirect physician ownership interests, including joint ventures, shell entities or stock holdings, as even minimal or indirect equity can implicate Stark law. Full financial disclosure, including side agreements, equity distributions or contingent payments, is essential to uncover potential referral- based incentives. 3. Physician compensation must reflect fair market value, be commercially reasonable and not be tied to the volume or value of referrals. Compensation models that create incentive structures for referrals are high risk and likely noncompliant if not structured under specific Stark law exceptions. 4. Review historical referral data, particularly for physician- owners, to identify patterns that may indicate self-referrals. Disproportionate referrals to the target clinic from certain physicians can be a red flag and require closer scrutiny. 5. Service contracts, such as lease arrangements, consulting agreements and medical directorships, must describe legitimate services, be consistent with fair market value, and be appropriately documented. Maintain thorough records of these agreements to demonstrate compliance during audits. 6. Prior to finalizing any deal, structured audits should be performed to examine financial arrangements, contract terms and referral behavior. All layers of ownership, including indirect and joint structures, should be mapped out to identify any hidden Stark law-triggering relationships. 7. Be alert to ownership structures or compensation models that lead to abnormal referral volumes from physician-owners. ese patterns may violate Stark law if not protected under an applicable exception and properly documented. 8. Acquisition terms must be carefully designed to meet Stark law safe harbors and exceptions. is includes ensuring payments are appropriately timed, contracts are in writing and financial arrangements are not contingent on referral volume or value. 9. Legal counsel with expertise in Stark law should be involved throughout the transaction process. ey can help vet ownership interests, design compliant compensation models, dra appropriate agreements,and ensure all statutory exceptions are met. 10. Aer the deal closes, establish ongoing compliance measures including periodic audits, documentation updates, and staff training. Also monitor state self-referral laws, which may impose additional requirements beyond federal Stark law provisions. n Physician AI use weakens patient trust: 3 notes By Francesca Mathewes P atients are less trusting of physicians who use AI, according to a study published in JAMA Network Open July 17. For the study, which took place in January, researchers created a sample of 1,276 U.S. adults based on the 2021 census. Participants were shown fictitious advertisements for family physicians that might be seen on social media or billboards. The participants received similar ads but were divided into four groups: one received ads that mentioned physician AI use for administrative purposes, one that mentioned physician AI use for diagnostic purposes, one that mentioned physician AI use for therapeutic purposes and one that made no mention of physician AI use. The participants were then asked to rate the physicians on a five-point scale for perceived competence, trustworthiness and empathy. They were also asked if they would be willing to make an appointment with the physicians. Here's how patients responses to the various advertisements: 1. Physicians were perceived as significantly less competent, less trustworthy and less empathic when patients were told that the physicians used AI for administrative, diagnostic or therapeutic purposes, compared with those in the non-AI control group. 2. Participants were also significantly less willing to make an appointment with the physician if any AI use was mentioned. 3. "From the physician's perspective, it thus may be important to transparently communicate the rationale for using AI and to emphasize its potential benefits for the patient," the researchers noted. n

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