FMV for Provider Contracts: Regulatory Standards

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By Kim Stanger

As a general rule, healthcare employers are required to pay employed physicians and other contracted providers fair market value (FMV) for their services, but many employers do not understand relevant regulatory standards. In this health law update, we summarize Stark and Anti-Kickback Statute considerations.

I. STARK (PHYSICIANS AND PHYSICIAN FAMILY MEMBERS).

The federal Ethics in Patient Referrals Act (aka Stark) prohibits physicians1 from referring certain designated health services (DHS)2 payable by Medicare or Medicaid to entities with which the physician or a family member of the physician has a financial relationship unless the arrangement is structured to fit within a statutory exception or regulatory safe harbor.3 Violations may result in significant penalties.4 Read more

Patient Inducements: Law and Limits

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By Kim Stanger

Although often well-intentioned, offering free or discounted items or services to patients (e.g., gifts, rewards, writing off copays, free screening exams, free supplies, etc.) may violate federal and state laws governing improper inducements, especially if the patient is a federal program beneficiary. The government is concerned that offering or rewarding such inducements to patients may result in overutilization, biased decisions concerning care, and increased costs to the Medicare, Medicaid, or other government programs. Penalties for illegal inducements may include administrative, civil, and criminal penalties; repayment to government programs; and exclusion from federal programs. Increasingly, private payors are also challenging such inducements. It is imperative that healthcare providers and their staff understand the applicable laws and limits. Read more

New Stark and Anti-Kickback Statute Comparisons

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By Kim Stanger, J. Malcolm DeVoy, and Amber Ellis

On November 20, 2020, CMS and the OIG published their much anticipated amendments to the federal Stark and Anti-Kickback laws. As summarized in our recent client alert, the changes open the door to value-based contracting with potential referral sources. They also modify existing regulations and create new safe harbors applicable to provider relationships.

Read more

Final Rules for Stark and Anti-Kickback Reforms Issued by CMS and OIG

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By Amber Ellis and J. Malcolm DeVoy

On November 20, 2020 the Centers for Medicare & Medicaid Services (CMS) and the Department of Health and Human Services Office of the Inspector General (OIG) issued two final rules to modernize and clarify the Physician Self-Referral regulations (the Stark Law, or Stark) and the Anti-Kickback Statute (AKS) safe harbor regulations. These new final rules generally take effect on January 19, 2021.

The prior Stark and AKS regulations were developed in a volume-based health care delivery and payment system. Over time, and with the rise of data that could be used by providers and payers to better anticipate patient needs and payment for them, concern arose that the existing regulations and policies would potentially inhibit the innovation necessary for moving toward a value-based system of care and payment. These new final rules aim to alleviate those concerns and advance the transition to value-based care and encourage the coordination of care among providers, while continuing to provide important safeguards to protect against fraud, abuse, and overutilization. Read more

Paying Employees for Referring Healthcare Business

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By Kim Stanger

Many healthcare employers may want to incentivize or compensate their employees for referring patients to or generating business for the employer, but they (appropriately) fear application of the federal Stark law or Anti-Kickback Statute.  The “Paying for Referrals” White Paper analyzes these laws and relevant exceptions that may permit referral-based compensation structures under certain circumstances.