Becker's Hospital Review

14 Sign up for the COMPLIMENTARY Becker's Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 c. King's Daughters' Hospital and Health Services (Madison, Ind.). In this case, the hospital self-disclosed its conduct involving employment contract bonuses based on services that the physicians did not personally render. Such an arrangement constitutes a violation of the Stark Law. The hospital settled for $391,500. d. St. Joseph Medical Center (Townson, Md.). St. Joseph paid $22 million to settle allegations of payment of kickbacks to MidAtlantic Cardiovascular Associates under the guise of professional services agreements in return for the group's referrals to the hospital. The settlement specifically resolved issues relating to professional services agreements which were being investigated for being above fair market value, not commercially reasonable or for services not rendered. 9. Compliance measures. To protect itself and its employed physicians, a hospital should employ certain practices to standardize physician employment arrangements. a. A hospital should ensure that all compensation contracts with physicians are in writing, signed by all parties, do not take into consideration the volume or value of referrals and internal documentation should be retained to support the fair market value nature of the compensation. The documentation should include the manner in which the compensation was determined, the surveys utilized and whether an opinion from a third party valuation firm was sought. e. It is also important that each compensation relationship is periodically reviewed on an ongoing basis to ensure the compensation is still consistent with FMV and complies with applicable law. b. All physician compensation arrangements should include a clear job description outlining the specific duties and services to be performed. Hospitals should also maintain an analysis and record of why a physician position is reasonably needed by the hospital. This may be particularly important where the need for the position may not be inherently clear or where a newly created position is being filled. f. A hospital should also consider adopting a reasonable compensation cap, especially if the arrangement is pursuant to a productivity-driven compensation structure. This concept is based on IRS guidance and may be more important where the arrangement has the potential for unusually high compensation. c. Hospitals should strongly consider obtaining third-party support for physician compensation arrangements where the physician is unusually productive or the compensation structure is outside normal practice.    d. As part of periodic compliance reviews, the hospital and physician should ensure that all agreements meet a core exception under the Stark Law and with comply or substantially comply with a safe harbor to the Anti-Kickback Statute. 10. Other applications of the key federal laws. The Stark Law, Anti-Kickback Statute and IRS guidelines generally apply to all financial arrangements between hospitals and physicians, including lease arrangements, medical directorships, recruitment stipends and even seemingly de minimus financial arrangements such as holiday parties, medical staff activities and CME allowances. Because of the broad applicability of these federal laws, each financial relationship between a hospital and physician should be structured to strictly comply with an applicable Stark Law exception and comply, or substantially comply, with an Anti-Kickback Statute safe harbor. n HFAP 1051 Final_Layout 1 3/20/13 3:26 PM Page 1 Confirm Your Excellence Ambulatory Surgical Center Accreditation "The HFAP survey process is straightforward. Mackinaw Surgery Center knows exactly what the regulatory expectations are without the guess work. This allows our Center to be consistent in its operations and at the same time challenges our team to strive to be the best at what we do. " -Steve Corl Administrator, Mackinaw Surgery Center, LLC Saginaw, MI www.hfap.org info@hfap.org CLIENT: Healthcare Facilities Accreditation Program APPEARANCE: ASC Review, April 2013 Norcom Incorporated Phone: 847-948-7762 E-Mail: theteam@norcomdesign.com

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