Physicians often straddle the line between roles in a practice as both employees and the central drivers of income for that business. This makes conversations around investment, growth and regulatory compliance potentially complicated, according to an Aug. 19 blog post from the law firm Husch Blackwell.
This is especially important when it comes to compliance with Stark law and the federal Anti-Kickback Statute, two commonly violated regulations that can result in serious financial, civil and criminal penalties.
Here are four tips from Husch Blackwell on maintaining compliance when "physicians are the revenue generators" of a business:
1) Stick to fair market value: Ensuring any transaction is at "fair market value" is an explicitly stated requirement for Stark law compliance and a solid rule of thumb overall, Husch Blackwell wrote. The firm suggested avoiding "any suggestion that the value of the transaction depends on or will change based on the volume or value of expected referrals from the physician owners." Any and all transactions should be based on objective metrics, such as earnings or comparable transactions and industry benchmarks.
2) Have detailed documentation of the valuation process. Be sure to include the methodology and sources used in determining the market value for services and transactions. This documentation should "clearly show that no referral-based considerations" were taken into account during the stated transactions. This is an important step in backing up compliance with Stark law and anti-kickback requirements, the firm wrote.
3) Keep communication formal and thoughtful. All communication about the financial performance of the business and its physicians should go through normal channels and protocols. Business owners should avoid singling out individual physicians for not meeting financial targets, as this can seem like pressure to increase referrals. Focus on metrics and keep communication about performance at a practice or group level, the firm wrote.
4) Make sure language is clear and compliant. Husch Blackwell recommended using language that "aligns with regulatory requirements," and communicates about performance metrics, operational efficiency, clinical outcomes and patient satisfaction objectively and professionally. They emphasize the importance of avoiding conversations that single out individual doctors or mention referral volumes.