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Stark law myths, part 2

Medical Staff Leader Connection, August 15, 2006

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What is important to understand about Stark is that it does not eliminate opportunities for appropriate physician-hospital collaboration, it simply requires that such collaboration be accomplished through carefully structured and documented arrangements that are "arms length," transparent, and fair. 

MYTH #6: Financial compensation for physician leaders is not permitted under Stark

To the contrary, financial compensation is entirely appropriate as a "fair market value" fee for documented services rendered by physician leaders on the hospital's behalf.

MYTH #7: Financial compensation for physician committee members is not permitted under Stark

Likewise, physician committee members may be compensated on an arms-length, fair-market value basis for time expended in legitimate hospital committee work.

MYTH #8: Financial support for physician educational programs is not permitted under Stark

Stark expressly permits hospitals to provide compliance training, and certainly does not preclude the hospital training its physicians in the medico-leadership functions they may be asked to provide on the hospital's behalf. Other forms of CME support may be provided under the "incidental benefits" and "de minimus" Stark exceptions.

MYTH #9: Incentives for physician productivity are not permitted under Stark

Properly structured productivity bonuses may be included in employment and independent contractor agreements.

MYTH #10: Incentives for physician performance is not permitted under Stark

Incentives for physician performance may be included in appropriately structured employment and independent contractor agreements, and may be structured into gainsharing arrangements as well.

The Department of Health and Human Services will continue to re-interpret Stark amendments in light of the critical need for physicians and their healthcare organizations to effectively collaborate in the coming era.  Until then, physicians, senior managers, and board members should consult attorneys who are expert in Stark related issues so that they may take full advantage of legally permitted opportunities in this demanding and increasingly competitive and complex healthcare environment.

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