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Handle Stark problems proactively

Healthcare Auditing Weekly, September 18, 2007

Stark may not have been high on a hospital's risk assessment chart in the past, but it should be now. If you don't have a firm and formal policy governing these physician relationships, this is a good time to develop one. If you have one, re-assess it for any areas that can be improved.

Through this work, some hospitals may find problems. If that occurs, seek legal guidance from a qualified healthcare lawyer, Stephen A. Miller, JD, chief compliance and privacy officer for Capital Health System, Inc., in Trenton, N.J. Make sure the firm you chose has experience in Stark and anti-kickback statutes.

Rauzi says hospitals in such circumstances really only have the following three options:

1. Document transactions retroactively with a transparent audit trail. Be prepared to argue that this satisfies the Stark Law.
2. Make prohibited arrangements part of a voluntary disclosure to the OIG.
3. Seek a voluntary Stark advisory opinion on the presumed problematic arrangement.

Arrangements that should be in writing but aren't could pose a particular area of concern, he says.

"My prediction is that hospitals will opt to formalize the arrangement in writing that is executed in 2007 but applies to 2006, and then submit those documents," Edwin Rauzi, a partner at Davis Wright Tremaine, LLC in Seattle. "It will be interesting to see how CMS will react to being provided documents of that type."

Going forward, though, all compliance officers are going to have to use more care in the Stark arena.

"Stark compliance is probably the most complex issue that compliance officers and healthcare lawyers address," Miller says.

He suggests reviewing survey responses with a qualified lawyer. This could help ensure accurate and appropriate responses and proactively address potential problems the process identifies.

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