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physician’s compensation includes other business generated by the physician for the entity as a variable, resulting in an increase or decrease in the physician’s compensation that positively correlates with the physician’s generation of other business for the entity.
C. A “positive correlation” between two variables exists when one variable decreases as the other variable decreases, or one variable increases as the other variable increases.
ii. Compensation from a physician (with some exceptions)
A. Compensation from a physician to a DHS entity takes into account the volume or value of referrals only if the formula used to calculate the entity’s compensation includes the physician’s referrals to the entity as a variable, resulting in an increase or decrease in the entity’s compensation that negatively correlates with the number or value of the physician’s referrals to the entity.
B. Compensation from a physician to a DHS entity takes into account the volume or value of other business generated only if the formula used to calculate the entity’s compensation includes other business generated by the physician for the entity as a variable, resulting in an increase or decrease in the entity’s compensation that negatively correlates with the physician’s generation of other business for the entity.
C. A “negative correlation” between two variables exists when one variable increases as the other variable decreases, or when one variable decreases as the other variable increases.
3. Amended Exceptions and Requirements.
a. A new rule for reconciling compensation arrangements was added.
b. Rental of Office Space and Rental of Equipment exceptions – amended to provide that “exclusive use” means that the lessee (and any other lessees of the same office space or equipment, as applicable) must use the office space or
equipment to the exclusion of the lessor (or any person or entity related to the lessor), and that the lessor (or any person or entity related to the lessor) may not be an invitee of the lessee to use the office space or equipment, as applicable.
c. Fair Market Value exception – amended to apply to leases of office space or equipment, in addition to the provision of items or services.
d. Directed referral requirement – amended to add a requirement that neither the existence of the compensation arrangement nor the amount of the compensation may be contingent on the number or value of the physician’s referrals to the particular provider, practitioner, or supplier; the requirement to make referrals to a particular provider, practitioner, or supplier may require that the physician refer an established percentage or ratio of the physician’s referrals to a particular provider, practitioner, or supplier.
4. New Exceptions.
a. Limited remuneration to physicians, up to $5,000 per calendar year, is allowed if certain conditions are met.
Arrangements that facilitate value-based health care delivery and payment – three new exceptions, based on the of level of financial risk.
Mr. Lebedinski is an equity partner with Giarmarco, Mullins & Horton, P.C., a full-service law firm in Troy, Michigan (www.gmhlaw.com). He concentrates his practice in the areas of Health Care Law and Business Transactions. He represents physicians, large and small physician group practices, physician organizations, diagnostic centers, ambulatory surgery centers and laboratories in the areas of federal and state healthcare regulatory compliance, including Stark Act prohibitions on self-referral, the Anti-Kickback Statute and HIPAA, as well as on a wide variety of business, employment and corporate law matters. He can be reached at 248-457-7058 or alebedinski@gmhlaw.com.
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THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE INTERPRETED OR RELIED UPON AS LEGAL ADVICE. EACH ARRANGEMENT IS UNIQUE AND SHOULD BE REVIEWED WITH THE ASSISTANCE OF COMPETENT PROFESSIONALS.