Whether you are selling a business, gifting stock to a family member or charity, or in need of a Healthcare Fair Market Value opinion for compliance with various federal statutes and regualtions, call us today for a free consultation: 615-473-9092.
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Healthcare FMV for Stark Law and Anti-Kickback Statute Compliance
Hospitals and Healthcare Organizations are subject to strict regulation by Federal Law and the Centers for Medicare and Medicaid Services (CMS), requiring a third-part Fair Market Valuation (FMV) for numerous arrangements, such as Physician Employment Agreements, Professional Service Agreements, and Vendor Arrangements with Physician-Owned Entities.
Hospitals and Healthcare Organizations are subject to strict regulation by Federal Law and the Centers for Medicare and Medicaid Services (CMS), requiring a third-part Fair Market Valuation (FMV) for numerous arrangements, such as Physician Employment Agreements, Professional Service Agreements, and Vendor Arrangements with Physician-Owned Entities.
Derek Schujahn is a Certified Valuation Analyst® and has worked on hundreds of FMVs for diverse healthcare arrangements since 2013. Call us today today for a free consultation to learn if your healthcare organization may be at risk for compliance to regulations, such as the Anti-Kickback Statute and Stark Laws.
Anti-Kickback Statute [42 U.S.C. § 1320a-7b(b)]
The AKS is a criminal law that prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks-those who offer or pay remuneration- as well as the recipients of kickbacks-those who solicit or receive remuneration. Each party’s intent is a key element of their liability under the AKS.
Criminal penalties and administrative sanctions for violating the AKS include fines, jail terms, and exclusion from participation in the Federal health care programs. Under the CMPL, physicians who pay or accept kickbacks also face penalties of up to $50,000 per kickback plus three times the amount of the remuneration.
Safe harbors protect certain payment and business practices that could otherwise implicate the AKS from criminal and civil prosecution. To be protected by a safe harbor, an arrangement must fit squarely in the safe harbor and satisfy all of its requirements. Some safe harbors address personal services and rental agreements, investments in ambulatory surgical centers, and payments to bona fide employees.
Physician Self-Referral Law [42 U.S.C. § 1395nn]
The Physician Self-Referral Law, commonly referred to as the Stark law, prohibits physicians from referring patients to receive “designated health services” payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies. Financial relationships include both ownership/investment interests and compensation arrangements. For example, if you invest in an imaging center, the Stark law requires the resulting financial relationship to fit within an exception or you may not refer patients to the facility and the entity may not bill for the referred imaging services.
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