One of the greatest threats to a hospital is associated with contracting with actual and potential sources of referral. With estimates of Medicaid and Medicare fraud costing the country anywhere between $48-$200 billion a year, there has been increased interest of the Office of Inspector General in reviewing contracts between hospitals and physicians.
While most hospitals appropriately handle the initial contractual arrangements with the physician, some hospitals lack appropriate monitoring procedures to ensure continued contract compliance. If such monitoring procedures are not already in place at your hospital, you should consider creating and maintaining an arrangements database to track all new and existing contracts with physicians in order to ensure that each contract does not violate the Anti-Kickback Statute and Stark Law.
Arrangements database
Certain vendors sell arrangements database software, but a hospital’s arrangements database can also be in the form of a spreadsheet. The database should contain certain information to assist the hospital in evaluating whether each arrangement violates the Anti-Kickback Statute and Stark Law, including but not limited to the following:
• Each party involved in the arrangement;
• The type of arrangement (e.g., physician employment contract, medical directors agreement, lease agreement);
• The term of the arrangement, including the effective and expiration dates and any automatic renewal provisions;
• The amount of compensation to be paid pursuant to the arrangement;
• The methodology for determining the compensation under the arrangement, including the methodology used to determine the fair market value of such compensation;
• Whether the amount of compensation to be paid pursuant to the arrangement is determined based on the volume or value of referrals between the parties; and
• Whether the arrangement satisfies the requirements of an Anti-Kickback Statute safe harbor and/or a Stark Law exception.
After the approval and execution of each arrangement, the arrangement should be given to the CFO or Chief Compliance Officer to be promptly loaded into the database. The CFO or CCO should then review the arrangements database on a regular basis. It is important for hospitals to have an arrangements database in place to avoid violations the Anti-Kickback Statute and Stark Law. Creating and maintaining an arrangements database as outlined above will improve the hospital’s current compliance program and help to identify potential violations of the Anti-Kickback Statute and Stark Law.
5 Tips for Aligning Physicians Through Contracts
While most hospitals appropriately handle the initial contractual arrangements with the physician, some hospitals lack appropriate monitoring procedures to ensure continued contract compliance. If such monitoring procedures are not already in place at your hospital, you should consider creating and maintaining an arrangements database to track all new and existing contracts with physicians in order to ensure that each contract does not violate the Anti-Kickback Statute and Stark Law.
Arrangements database
Certain vendors sell arrangements database software, but a hospital’s arrangements database can also be in the form of a spreadsheet. The database should contain certain information to assist the hospital in evaluating whether each arrangement violates the Anti-Kickback Statute and Stark Law, including but not limited to the following:
• Each party involved in the arrangement;
• The type of arrangement (e.g., physician employment contract, medical directors agreement, lease agreement);
• The term of the arrangement, including the effective and expiration dates and any automatic renewal provisions;
• The amount of compensation to be paid pursuant to the arrangement;
• The methodology for determining the compensation under the arrangement, including the methodology used to determine the fair market value of such compensation;
• Whether the amount of compensation to be paid pursuant to the arrangement is determined based on the volume or value of referrals between the parties; and
• Whether the arrangement satisfies the requirements of an Anti-Kickback Statute safe harbor and/or a Stark Law exception.
After the approval and execution of each arrangement, the arrangement should be given to the CFO or Chief Compliance Officer to be promptly loaded into the database. The CFO or CCO should then review the arrangements database on a regular basis. It is important for hospitals to have an arrangements database in place to avoid violations the Anti-Kickback Statute and Stark Law. Creating and maintaining an arrangements database as outlined above will improve the hospital’s current compliance program and help to identify potential violations of the Anti-Kickback Statute and Stark Law.
Related Articles on Physician Contracts:
Physician Hospital Contracting – A Compliance Approach: 11 Key Concepts5 Tips for Aligning Physicians Through Contracts