Hospitals and health systems need to update their physician compensation plans after CMS' recent changes to the Stark Law, according to an article in JDSupra from the law firm Foley and Lardner.
These arrangements should be "carefully reviewed" if the hospital seeks to meet the Stark Law employment or indirect compensation arrangement exceptions, according to the Sept. 7 report.
Three things to note:
1. Physician compensation plans where productivity is above the 75th percentile could trigger review. These plans should ensure that compensation is consistent with the physician's personal productivity, instead of assuming anything below the 75th percentile will be fair market value.
2. Compensation should also be consistent with the services performed by the practitioner. If a physician is compensated based on their advanced practice providers' work relative value units, for example, hospitals should ensure that compensation is explicitly for the services performed by the physician, such as supervision.
3. Indirect compensation agreements should be reviewed, because certain compensation agreements that consider APP work relative value units as physician compensation might not meet commercial reasonableness and fair market value tests.