The United States Department of Health and Human Services (DHHS) has published updates to Section 1877 of the Social Security Act, commonly referred to as the Stark Law. The “Physician Self-Referral Updates” impact a health care provider’s determination whether the Stark Law has been violated, and whether the provider should pursue a Stark Law self-disclosure under the Self-Referral Disclosure Protocol.
This regulatory update has been issued in response to a recent uptick in health care industry consolidations. More and more health care providers are considering acquisitions and mergers. While undertaking due diligence in these acquisitions, multiple physician arrangements may give rise to the concern that there is a Stark Law compliance issue. The party discovering the issue may want to resolve it by providing a self-disclosure before completing the transaction. The recent Physician Self-Referral Updates to the Stark Law may abolish the need to self-disclose pursuant to the Self-Referral Disclosure Protocol.
DHHS has provided clarification as to how to handle perceived Stark Law violations in the following common scenarios:
- When an agreement between a provider of designated health services and a physician has not been signed, under the current Stark Law, parties have 30 or 90 days to obtain a signature depending upon whether the failure was inadvertent. The Updates allow parties 90 days to get the signatures, whether inadvertent or not.
- A referring physician and the provider of designated health services no longer need to have a written agreement identifying a term of one year or more for rental of office space, equipment, and personal service arrangements. Instead, the parties only need documentation showing that an arrangement lasted for at least one year. According to DHHS, this clarification of the law applies retroactively and into the future.
- The current Stark Law permits for “holdovers” of up to six months if a lease of at least one year expires. Effective January 1, 2016, indefinite holdovers will be permitted if certain conditions specified in the Updates are met.
- DHHS has clarified that there is no requirement under the physician self-referral law that an arrangement be documented in a single, formal contract. This applies to the lease of premises, lease of equipment, fair market value, bona fide employment and personal service exceptions. Contemporaneous documents can, in certain specified cases, suffice. The documents must clearly relate to one another and evidence that they are part of the same agreement.
- DHHS has clarified that only physicians who “stand in the shoes” of their physician organization are considered parties to an agreement for purposes of signature requirements. In other words, not all physicians must sign the agreement between the provider of designated health services and the physician organization.
Philadelphia Stark Law Attorneys at Sidney L. Gold & Associates Assist Clients with Stark Law Compliance
Philadelphia health care lawyers at Sidney L. Gold & Associates have been representing physicians and health care organizations for over 35 years. We have extensive experience in advising physicians and health care organizations how to avoid Stark Law violations. If you or someone you know has been accused of violating Stark Laws, we can help. With offices located in Center City Philadelphia, we serve clients throughout Pennsylvania, New York and New Jersey. Call us at 215-569-1999 or contact us online.