Corporate Compliance

Tip: Compensation arrangements with physicians

Compliance Monitor, November 21, 2007

According to the OIG, hospitals should review their physician compensation arrangements and carefully assess the risk of fraud and abuse. Ask the following questions regarding compensation arrangements, among others:

  • Are the items and services obtained from a physician legitimate, commercially reasonable, and necessary to achieve a legitimate business purpose of the hospital (apart from obtaining referrals)?
  • Assuming that the hospital needs the items and services, does the hospital have multiple arrangements with different physicians, so that in the aggregate the items or services provided by all physicians exceed the hospital's actual needs (apart from generating business)?
  • Does the compensation represent fair market value in an arm's-length transaction for the items and services?
  • Could the hospital obtain the services from a nonreferral source at a cheaper rate or under more favorable terms?

For more information on compliance with the Stark Law, sign up for the audioconference "Stark II Phase III Unveiled: Practical Strategies for Compliance" on 12/6/07.

    Most Popular