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Conducting Stark audits

Healthcare Auditing Weekly, June 28, 2005

To ensure compliance with Stark (the physician self-referral law), you must be sure that your facility pays physicians fair market value for all services performed, that all compensation arrangements fit an exception to Stark, and that the hospital is not receiving prohibited referrals. Follow these steps when auditing for Stark compliance:

1. Read the Stark regulations closely to identify what the regulations prohibit and to which services Stark applies.

2. Identify all compensation arrangements. Pay close attention to the following types of agreements:

• Medical director
• Management
• Hospital-based physician
• Lease of space and equipment
• Recruitment
• Managed care

3. Identify the following for each compensation arrangement:

• Physician
• Agreement type
• Effective date
• Term of contract
• Contract manager
• Compensation and basis for pricing

4. Conduct interviews. Always interview these key players during a Stark audit:

• Contract administer and contract managers&emdash;find out what negotiations went on and why the deal went the way it did
• Medical staff office&emdash;the staff knows best what their physicians are doing
• Hospital administration&emdash;administration may have had problems with certain physicians of which no one else is aware

Look for next week's issue when we cover the next four steps for Stark audits.

The above tip is an excerpt from the book "Hospital Auditing and Monitoring: Sample Programs for Key Risk Areas," copyright 2005 by HCPro, Inc. This book is a step-by-step, practical manual that offers sample audit programs for the most troublesome areas that a hospital must audit. The binder and CD-ROM are filled with actual audit programs used by auditors and compliance officers in the field. Click here for more information or to order your copy today.

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