Developing effective lines of communication. Limited Remuneration: Codified at 42 C.F.R. Three main laws impact employment . . R. Civ. The Stark Law applies to physicians and designated health services only, while the Anti-Kickback Statute applies to anyone and any services . Given the significance of FMV to regulatory compliance, it is important to understand its relationship to physicians and healthcare entities. Critical Components of Compliant Compensation Models Processes for Documenting Fair Market Value and Commercial Reasonableness Best Practices for Auditing Compensation Plan Implementation Common Compensation Models in the Industry based On Specialty . However, given the changing landscape of today's healthcare system, and specifically the transition from fee-for-service to value-based reimbursement, Stark Law is now an obstacle to advancing care coordination. Doctors Lawyer-Practice Group Lawyer - A single Physician's skill set is literally a productive asset for a healthcare institution. The CMS Final Rule implements changes to the Stark Law and offers several clarifying provisions related to key Stark Law terms and concepts. The Stark law prohibits the submission, or causing the submission, of claims in violation of the law's restrictions on referrals. With regard to fair market value (FMV), industry best practice suggests that you _____ in order to better withstand government scrutiny. The Final Rule. It inhibits innovation, contains an eccentric mix of excessively general and overly . FMV under the Stark Law means that the payment is consistent with "general market value," which is defined as "compensation that would be included . This paper briefly discusses 10 key considerations related to hospital-physician compensation arrangements. This podcast's subject matter is a fair market value and commercial reasonableness discussion as well as changes to the Stark Law the Anti-Kickback Statute regulations and the 2021 Medicare . 3) Specify an aggregate payment, which is set in advance. On March 30—but retroactive to March 1—the Secretary of HHS issued a partial waiver of elements of the Stark Law. . In November 2020, the Department of Health and Human Services published the long-awaited and highly anticipated final rules revising the regulations related to the Stark, AKS, and CMP Laws.The final rules provide a much-needed framework for protecting certain value-based arrangements that incentivize care coordination, quality of care, and cost containment. Critical to compliance with the Stark Law is that the payment to the physician be at fair market value (FMV). With regard to fair market value (FMV), industry best practice suggests that you _____ in order to better withstand government scrutiny. Stark Law forbids physicians from referring patients to receive "designated health services" from entities in which the physician . . •Hall Render is the largest health care focused law firm in the country, with 5 practice groups and 21 services lines serving health care clients nationwide. On March 30, 2020, the Centers for Medicare & Medicaid Services (CMS) issued blanket waivers to the Stark Law that permit certain arrangements between physicians and health care providers implemented in response to COVID-19 that would otherwise violate the Stark Law. The DOJ took just that position in a False Claims Act case against Tenet, where a whistle-blower and the government alleged the hospital paid certain physician-employees substantially more than they had made in private practice. David H. Glusman is an advisory partner in Marcum LLP's Philadelphia office. 201 East Fifth Street Suite 1110 Cincinnati, OH 45202-4152 t: 513.870.6700 f: 513.870.6699. info@bricker.com. Chapter 5. The Stark Law safe harbor provision has seven components. The Stark Law is a strict liability . That's because fair market value can become an issue under the Stark antikickback regulations, which say: "Unless an exception applies . Final Rules also provide guidance related to fundamental concepts under the Stark Law, including commercial reasonableness, the volume or value standard, and fair market value. On November 20, 2020, the Office of Inspector General (OIG) and Centers for Medicare & Medicaid Services (CMS) jointly finalized changes to outdated federal regulations that have burdened health care physicians with added administrative costs and impeded the health care system's move toward value-based reimbursement. The exception applies only to items or services actually provided, and includes . Sets with . This conversation dives into the practical considerations that affect the analysis of fair market value and commercial reasonableness under Federal Physician Self-referral law (also known as the "Stark Law") and the Federal Anti-kickback Statute. This is the first in a four-part CenterWatch Weekly series on the principles and best practices of setting investigator compensation levels that are both fair and compliant with federal laws. (1) Able to securely exchange data with and use data from other health information technology; and. Travis Lloyd. Why you should Attend: Several recent cases and settlements involving employed physicians have helped to illustrate the importance of Stark Law compliance. On November 20, 2020, the Department of Health and Human Services (HHS) released the final rules 1 to amend the regulations for the federal physician self-referral statute (Stark Law), 2 the federal Anti-Kickback Statute (AKS), 3 and the civil monetary penalty (CMP) statute 4 as part of the "Regulatory . 2018. Establishing Fair Market Value • "Ultimately, fair market value is determined based on facts and circumstances. Model works best in states where corporate practice of medicine is an issue . Designating a compliance officer and compliance committee. Billing errors and omissions insurance are . In addition, the gift may not be solicited by the physician or your staff. Stark Law ("Stark")1, and the Medicare and Medicaid Anti-kickback Statute (the "AKS")2. Key federal laws effecting physician compensation. One practice that has been found to run afoul of these laws occurs when post-acute providers provide staff or services to a hospital to perform functions that the hospital would otherwise perform on its own and at its own cost. While the hypothetical fair market value is $450,000, the general market value may exceed that. He provides consulting services in the areas of forensic accounting, litigation support, health care fraud, and high . As health care organizations enter . He will discuss best practices for negotiating and drafting contracts and compensation plans, including common provisions and potential pitfalls to avoid. . Healthcare is a highly regulated industry on both a state and federal level. 5. fair market value compensation, indirect compensation arrangement, and; limited remuneration to a physician (which is a new exception). WASHINGTON -- Physicians should tread carefully when trying to arrive at a fair market value for office space they're renting. Fair Market Value (§ 411.351) C. Group Practices (§ 411.352) 1. Mitigate risk by ensuring physician compensation arrangements are compliant with fair market value and commercial reasonableness standards. . The Stark law does maintain a definition of fair market value but it does not dictate actual numbers. The new BVR/AHLA Guide to Valuing Physician Compensation and Healthcare Service Arrangements, Second Edition challenges and deconstructs the industry's current standard for the fair market value (FMV) of physician clinical compensation based on the exclusive use of survey data and certain percentile-based valuation methods. A "Stark" Difference in Fair Market Value and Commercial Reasonableness Is Coming in 2021. On December 2, 2020, the Centers for Medicare & Medicaid Services ("CMS") finalized long-awaited changes to the rules under the Physician Self-Referral Law, known as the "Stark Law." As discussed in our publication in 2019, CMS proposed the regulatory revisions in part to resolve uncertainty surrounding the terms "commercially reasonable . The purpose of both the federal Anti-Kickback Statute and the Stark Law is to protect against improper financial influences on medical decision-making. Designating a compliance officer and compliance committee. Stark Law (Stark). Critical Components of Compliant Compensation Models; Processes for Documenting Fair Market Value and Commercial Reasonableness; Best Practices for Auditing Compensation Plan Implementation; Common Compensation Models in the Industry based On Specialty; Potential Changes to the . Payment of fair market value is a dispositive defense in FCA actions alleging a violation of the Anti . Stark Law provides this definition: The term "fair market value" means the value in arm's length transactions, consistent with the general market value…(42 USC § 1395nn) 42 CFR §411.351 -"general market value" means the price that an asset would bring or that would be included in a Many of these investment relationships have serious legal risks under the AKS and Stark law. Directions A commitment to using the best practices in any field is a commitment to using all the knowledge and experience at one's disposal to ensure success. For instance, Fair Market Value (FMV) is defined by Revenue Ruling 59-60, as, "the price at which the property would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy and the latter is not under . Areas Covered in the Session: Legal and Regulatory Overview (e.g., Stark, Anti-Kickback, etc.) Penalties for physicians who violate the Stark law include fines as well as exclusion from . § 411.352 (z), the limited remuneration exception allows for payments to physicians for items and services up to "an aggregate of $5,000 per calendar year, as adjusted [annually] for inflation…". •Hall Render is the largest health care focused law firm in the country, with 5 practice groups and 21 services lines serving health care clients nationwide. . Key Points: False Claims Act plaintiff cannot use discovery to satisfy Fed. . In the OIG's Compliance Program Guidance documents¹, there are seven key elements of an effective compliance program including: Implementing written policies, procedures and standards of conduct. Fair market value. Thus, "compensation substantially above $450,000 per year may be fair market value," according to . 1877nn(h)(3) • Value in arms-length transactions, consistent with general market value • Rentals or Leases - value of rental property for general commercial purposes, not taking into account its intended use • Space Lease - not taking into account the value the lessee or The physician self-referral law (known as the Stark Law) Applicable exceptions generally require that the compensation paid to the management company or physician managers reflects fair market value and is structured in a manner not to vary based on volume or value of referrals. Best Practices can be most easily understood as . as the result of bona fide bargaining between well-informed parties to the . The other four are the Anti-Kickback Statute, the Civil Monetary Penalties Law, the Exclusion Statute, and the False Claims Act. FMV under the Stark Law means that the payment is consistent with "general market value," which is defined as "compensation that would be included . Critical Business Issues Transaction Issues -Purchase price • Consider tax consequences to physicians On 2 December 2020, the Centers for Medicare & Medicaid Services (CMS) published a Notice of Final Rulemaking in the Federal Register (Final Rule), 1 modifying the regulations implementing the federal physician self-referral law (the Stark Law). It is fair to say that virtually every relationship between a physician and a hospital will involve the referral of designated health services. Ultimately, the Stark Law's directed referral provisions give health care organizations plenty of leeway to use, monitor, and enforce directed referral requirements in their physician contracts. Interpretation of the "Volume or Value Standard" for Purposes of the Group Practice Regulations (§ 411.352(g)) 2. The panel will review these and other noteworthy issues: The "Big 3"--fair market value, commercial reasonableness, and volume/value standards; AKS safe harbors and Stark Law exceptions; Impact of the Final Rules on healthcare providers and healthcare M&A; Faculty Best practices and recommendations; Benefits. The Stark Law, as it has evolved, is one of the worst legislative enactments affecting the healthcare industry. . $260 MILLION Health Management Associates settled allegations that it paid remuneration to physicians in return for patient referrals, along with a variety of other violations of the Stark . The Anti-Kickback Statute, 42 U.S.C. A physician group practice paid the Government $1 million and entered . 6 Mark O. Dietrich, CPA/ABV Stark II -Statutory Guidance • Stark Statute - 42 U.S.C. Cincinnati. The hospital allegedly paid physicians for more than fair market value. Critical to compliance with the Stark Law is that the payment to the physician be at fair market value (FMV). While the hypothetical fair market value is $450,000, the general market value may exceed that. 171, CMS, 42 CFR Parts 411 and 424, September 5, 2007). Fair-market-value compensation exception. •Joe has considerable experience with technical Stark and Anti-Kickback analysis, physician compensation and fair market value issues. Anti-Kickback Statute The Volume or Value Standard: Navigating the Stark Law's Prohibition on 'Taking Into Account' Designated Health Service Referrals Chapter 7. In the OIG's Compliance Program Guidance documents¹, there are seven key elements of an effective compliance program including: Implementing written policies, procedures and standards of conduct. (2) Allows for complete access, exchange, and use of all electronically accessible health information for authorized use under applicable State or Federal law. resource and reputational risk for potential physician compensation violations related to the Stark Law, the Anti-Kickback Statute and IRS not-for-profit regulations. . The Stark law is a strict liability statute, which means proof of specific intent to violate the law is not required. Conducting effective training and education. affect compliance with the Stark Law, namely fair market value and commercial . These final policies recognize that incentives are different in a healthcare system that pays for the value, rather than the volume, of services provided. That's because fair market value can become an issue under the Stark antikickback regulations, which say: "Unless an exception applies . The appropriate method will depend on the nature of the transaction, its location, and other factors." (Federal Register, Vol. WASHINGTON -- Physicians should tread carefully when trying to arrive at a fair market value for office space they're renting. The waiver is subject to revision and termination, but presumptively will remain in effect for the duration of the COVID-19 public health emergency. P. 9(b). Among the many extraordinary measures taken by the federal government in response to the COVID-19 pandemic is the issuance of blanket waivers of . . 2 While the definition of FMV has its roots in business valuation,3 FMV in the healthcare industry is a regulatory definition. Internal Revenue Ruling 59-60 defines . The waivers, which are numerous and fairly broad, offer health care entities significant flexibility to combat COVID-19 in ways . This article is intended to provide only a brief summary of the Stark and AKS regula-tory framework governing specific healthcare marketing activities, including providing entertainment and/or gifts to referral sources. as the result of bona fide bargaining between well-informed parties to the . Key Takeaways from the AKS Final Rule. May 10, 2022 at 11:37 AM 6 minute read The law presumes that amounts paid above fair market value may be disguised payments for referrals. How to fairly compensate principal investigators (PI) for their role in a clinical trial can too often feel like a difficult decision for trial sites. The Imperative to Meeting the Stark Group Practice Definition Chapter 8. 888.739.7039 . The following definition is from the regulations: means the value in arm's-length transactions, consistent with the general market value. § 1320a-7b(b), covers a broader range of activity than the Stark Law, and extends to all medical providers in a position to arrange or recommend medical services."Referrals" under the Anti-Kickback Statute include "any item or service for which payment may be made in whole or in part under a Federal health care program." Healthcare valuations require industry-specific knowledge and an understanding of how valuation approaches and methods apply to health care. While fair market value (FMV) and commercial reasonableness (CR) have been vital considerations within healthcare transactions for many years, the concept of pay for performance compensation programs in the context of CINs, ACOs, and other similar integrated care models is relatively . Medical staff gifts have a limit of $25 per gift, adjusted each year, with no aggregate limit. Legal and Regulatory Overview (e.g., Stark, Anti-Kickback, etc.) With our unique . . . There are Stark Law exceptions available to protect payments under a co-management contract. On November 20, the Centers for Medicare & Medicaid (CMS) and the Department of Health and Human Services Office of Inspector General (OIG) issued a 627-page final rule which will serve to modernize and clarify Stark Law regulations. The fair market value requirement of the personal services exception and . Many of the new and revised regulations apply beyond financial arrangements related to care coordination initiatives, and thus are crucial for all A healthcare appraisal firm should determine fair market value. He has extensive experience preparing Fair Market Value reports (FMV) for Stark Law compliance, including preparation of FMVs for timeshare properties. Conducting effective training and education. Included in the changes are definitions and special rules related to: (1) commercial reasonableness, (2) the volume or value standard and other business generated standard, and (3) fair market value and . 42 CFR § 411.357 (l) created a fair-market-value exception for compensation resulting from an arrangement between an entity and a physician, an immediate family member or any group of physicians for the provision of items or services by the physician, family member or group of physicians to the DHS entity. Infectious diseases (ID) physicians serving as infection prevention or antimicrobial stewardship medical directors must receive reimbursements that are consistent with the fair market value (FMV) of their services.As defined by the physician self-referral law ("Stark") law, fair market value is "the value in arms length transactions, consistent with the general market value" of your services. [2] Medical Group Management Association Physician . A Best Practice can be defined as a technique or methodology that, through experience and testing, has proven to reliably lead to a desired result. . "General market value" means the price that an asset would bring as the result of bona fide . And for those who may be new to the industry, the limitations of the laws in question can be surprising . 4) Have a payment or salary provision that is reasonable and is at fair market value. "General market value" is the compensation that would be included in a service agreement as the result of bona fide bargaining between well-informed parties who are not otherwise in a position to generate business for the other . Stark Law currently provides some regulatory guidance on the definition of . The new value-based exceptions include a carefully woven fabric of safeguards to ensure that the Stark Law continues to provide meaningful protection against overutilization and other harms. Although lengthy (190 pages/3-column format), the Final Rule is worth the read with multiple clarifications and revisions to the dense . [3] Stark prohibits patient referrals for designated health services payable by Medicare or Medicaid to an entity with which a physician, or their immediate family member, has a financial relationship. A physician compensation committee is an essential part of oversight. 72, No. Stark defines fair market value (FMV) as... Answer Choices . CMS made impactful changes to the Federal physician self-referral law's (i.e., Stark Law's) regulations in its Final Rule that were effective January 19, 2021 (with the exception of the changes to 42 C.F.R. Law360 (May 8, 2020, 6:30 PM EDT) --. a hospital may pay you a fair market value salary as an employee or pay you fair market value for specific services you render to the hospital as an independent contractor. In addition to fair market value, most applications of the anti-kickback statute and Stark law also require commercial reasonableness. 1. His experience also encompasses various consulting services such as feasibility studies, going concern valuations, and highest and best use analyses for healthcare investors and operators.