Corporate Compliance

Medical director service compensation

Compliance Monitor, July 8, 2005

Q: Are dialysis facilities required to limit compensation for medical director services to the amount allowed under the fair market value "safe harbor" provision in the Stark Phase II interim final regulations?

A: No. In an effort to address public concerns about how to determine fair market value for medical director compensation, the Stark Phase II regulations provide a "safe harbor" under the definition of "fair market value" at § 411.351 for hourly payments to physicians that are calculated using one of two specified methodologies.

However, use of the safe harbored methodologies is strictly voluntary. Parties may use other appropriate methodologies to determine whether compensation is fair market value. Entities that choose to use either of the two safe harbor methodologies will be assured that their compensation rates will be deemed fair market value for purposes of the Stark law.

For more information on the safe harbor methodologies, see the Phase II preamble discussion at 69 Fed. Reg. 16092 and the definition of "fair market value" at 42 C.F.R. § 411.351.

Source: Centers for Medicare & Medicaid Services.

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