Uncategorized
Mar 04

Parties, Parking Spaces, and Lurking Stark Law Violations

Great post by Martie Ross (mross@lathropgage.com):

Once a year, the federal government adjusts the dollar limits under the non-monetary compensation and incidental medical staff benefits exceptions under the Stark Law. And once a year we like to take the opportunity to remind hospitals of the importance of tracking such remuneration to members of their medical staffs.

The non-monetary compensation exception permits hospitals to provide entertainment, meals, and other non-cash equivalent benefits to a medical staff member up to a specified dollar limit. For calendar year 2009, that amount is $355.00, up from $328.00 in 2008. As with all Stark exceptions, there are several specific requirements which must be satisfied:

  1. The compensation is not determined in any manner that takes into account the volume or value of referrals or other business generated by the referring physician.
  2. The compensation may not be solicited by the physician or the physician’s practice (including employees and staff members).
  3. The compensation arrangement does not violate the Anti-Kickback Statute or any federal or state law or regulation governing billing or claims submission.

If a hospital is overly generous, and inadvertently provides such compensation in excess of the $355 limit, Stark will not be violated if (1) the value of the excess non-monetary compensation is no more than fifty percent of the $355 limit (i.e., total compensation not exceeding $532.50); and (2) the physician returns the excess non-monetary compensation (or an amount equal to the value of the excess non-monetary compensation) by the end of the calendar year in which the excess non-monetary compensation was received or within 180 consecutive calendar days following the date the excess non-monetary compensation was received by the physician, whichever is earlier. This "return" option may be used by an entity only once every 3 years with respect to the same referring physician. If the requirements for the return option are not satisfied, the excess compensation will result in a Stark law violation.

The non-monetary compensation exception also permits a hospital to provide one local medical staff appreciation event per year for the entire medical staff without having to count those costs towards the annual limit. The exception places no limits on the amount a hospital can spend on such an event. However, any gifts or gratuities provided by the hospital in connection with the medical staff appreciation event are subject to the $355 limit.

A hospital which fails to track such compensation on a per-physician basis cannot demonstrate compliance with this exception's requirements. As a result, any such compensation given to a medical staff member — even if well under the $355 limit — would place the hospital at risk of a Stark violation and the significant penalties associated with it.

A close cousin to the non-monetary compensation exception, the exception for medical staff incidental benefits, applies only to non-cash items and services provided while the physicians are present on the hospital's campus. Again, there are several requirements which must be met for this exception to apply:

  1. The benefit is offered to all members of the medical staff practicing in the same specialty (but not necessarily accepted by every member to whom it is offered) without regard to the volume or value of referrals or other business generated between the parties.
  2. Except with respect to identification of medical staff on a hospital website or in hospital advertising, the benefit is provided only during periods when the medical staff members are making rounds or are engaged in other services or activities that benefit the hospital or its patients.
  3. The benefit is provided by the hospital and used by the medical staff members only on the hospital’s campus. Internet access, pagers, or two- way radios used away from the campus only to access hospital medical records or information or to access patients or personnel who are on the hospital campus, as well as the identification of the medical staff on a hospital website or in hospital advertising, satisfies this ‘‘on campus’’ requirement.
  4. The benefit is reasonably related to the provision of, or designed to facilitate directly or indirectly the delivery of, medical services at the hospital.
  5. For calendar year 2009, the value of any such benefit made available to a medical staff member does not exceed $30.00 (up from $28.00 in 2008). For example, no meal provided to a physician while attending a medical staff meeting may exceed $38.00. There is no limit on the aggregate value of such benefits over the course of a year. 
  6. The benefit is not determined in any manner that takes into account the volume or value of referrals or other business generated between the parties.
  7. The provision of the benefit does not violate the Anti-Kickback Statute or any federal or state law or regulation governing billing or claims submission.
  8. The benefit offered is consistent with what other hospitals in the community make available to members of their medical staffs.

Hospitals should adopt specific policies and procedures concerning medical staff incidental benefits, and implement appropriate procedures to ensure only permissible benefits are offered to medical staff members, and those benefits which are made available meet these regulatory restrictions. Again, a hospital which fails to do so may face the significant penalties associated with Stark Law violations.

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →