stark law fair market value industry best practice stark law fair market value industry best practice

thousands of dollars) for apartment buildings. See our dedicated page. The Anti-Kickback Statute is a criminal law that prohibits healthcare organizations from knowingly and willfully paying any remuneration to induce patient referrals or to generate business involving any service payable by the federal healthcare programs. CMS removed "general market value" from the definition of "fair market value" at 42 C.F.R. The exception permits both monetary and nonmonetary remuneration between the parties. https://www.healthlawyers.org/Events/Programs/Materials/Documents/PHS15/kk_homchick_hutzler_shay.pdf, https://www.bdo.com/blogs/healthcare/april-2015/commercial-reasonableness-analysis?feed=8799bc52-2237-4688-aeac-83e40e623b56, http://www.americanbar.org/content/dam/aba/events/health_law/2015_Meetings/DocLaw/Papers/10_valuation_03.authcheckdam.pdf, http://www.worldservicesgroup.com/publications.asp?action=article&artid=2086, http://www.healthcapital.com/hcc/newsletter/10_12/HCVAL.pdf, New Timeshare Arrangement Exception under Stark Law. This is not to say that organizations and individuals cant achieve high levels of income but it is to say that the aims in healthcare are much different than you might see in investment banking, entertainment industries, or in sporting industries. Posted on October 27, 2016August 15, 2022. Unlike the civil nature of Stark Law, the Anti-Kickback Statute is under both civil (administrative) and criminal laws. healthlawyers.org. The following definition is from the regulations: means the value in arms-length transactions, consistent with the general market value. healthcapital.com. For more information on Stark Law Exceptions, see our dedicated page. We are uncertain why the commenters believe that it is CMS policy that compensation set at or below the 75th percentile in a salary schedule is always appropriate, and that compensation set above the 75th percentile is suspect, if not presumed inappropriate. Typical compensation per Work Relative Value Unit rates could be significantly off from traditional levels for given specialties. They are: (a) the lease agreement must be in writing; (b) the . The general market value definitions are: What does it mean for a compensation arrangement to be commercially reasonable? Civil penalties of the AKS include False Claims Act liability, civil monetary penalties (CMP) and program exclusion, up to $50,000 CMP per violation, and civil assessment of up to three times the amount of kickback. The Stark Law defines FMV as the value in arms length transactions, consistent with general market value. The case underscores that the OIG cares about technical as well as substantive compliance with the Stark law. The Anti-Kickback Statute (AKS), 42 U.S.C. In turn, CMS is willing to accept any commercially reasonable methodology that demonstrates compensation is comparable to what is ordinarily paid for services in an arms-length transaction. Compensation arrangements that are required to be representative of . An arrangement may be renewed any number of times if the terms of the arrangement and the compensation for the same items or services do not change. The Court concluded that the payment above fair market value for the services that were actually required to be performed would serve some other purpose, such as compensation for referrals. Which of the following are exceptions under Stark? New Value-Based Exceptions. Specialties like critical care, hospital medicine, emergency medicine, and pulmonary medicine may have experienced increases in patient volume due to the pandemic. In our prior article, we provided a basic overview of Fair Market Value (FMV) assessments and how these have become a key aspect in compensation contracts for cardiologists.We also reviewed how practices should focus on demonstrating their value to hospitals and health systems by showcasing leadership efforts within the practice and hospital, attention to strategy, financial performance . Office-based primary care has been significantly affected as offices were closed for a period of time and then had to adjust to telehealth and virtual visits. The final rule creates new exceptions to the Stark Law for value-based arrangements that satisfy specified requirements based on the characteristics of the arrangement and the level of financial risk assumed by the . These statutes currently reside under the purview of Centers for Medicare & Medicaid Services (CMS) fraud and abuse laws. Financial arrangements are commercially reasonable if they are at FMV, services provided are documented and deemed necessary, and when the services cannot be provided at a lesser value. With respect to the rental of equipment, fair market value means the value in an arms-length transaction of rental property for general commercial purposes (not taking into account its intended use), consistent with the general market value of the subject transaction. 3) Specify an aggregate payment, which is set in advance. The original content piece along with other guide publications can be accessed here. With regard to fair market value (FMV), industry best practice suggests that you _____ in order to better withstand government scrutiny. The compensation must be set in advance, consistent with fair market value, and not determined in a manner that takes into account the volume or value of referrals or other business generated by the referring physician. If an appraiser is hired, the appraiser's qualifications and experience must be considered if that appraisal will be relied upon. 411.353 Prohibition on certain referrals by physicians and limitations on billing. A and B - not be conditioned on referrals & allow the physician to establish medical staff membership at other hospitals. Barnes & Thornburg LLP. It is important to maintain documents of services provided by healthcare professionals and have agreements in writing, along with documents supporting the financial transaction at FMV, for actual duties performed to standardize financial transactions and to prevent violation of fraud and abuse laws. Please join us on September 13 th! "General market value" is the compensation that would be included in a service agreement as the result of bona fide bargaining between well-informed parties who are not otherwise in a position to generate business for the other . There are four basic methods of determining fair market value. The Stark Law prohibits physicians from referring patients for services to entities in which the physician or _____ has a financial interest. Commercial Reasonableness Analysis for an Increasingly Regulated Healthcare Environment | BDO Healthcare Industry Blog . Allows the electronic health records (EHR) exception to be unending and allows limited donations of cybersecurity that are necessary for EHR, flexible physician payment schedules, and donations of replacement EHR items. 411.354 Financial relationship, compensation, and ownership or investment interest. The AKS Final Rule creates new safe harbors for entities participating in a value-based enterprise (VBE) and amends existing safe harbors. In reading CMS comments in the Federal Register, there is no doubt that CMS views each case as unique and there is not a set formula or methodology for determining fair market value. CRNAs are only one examplethe same challenges could easily apply to any physician specialty or market. Thanks for reaching out. Q. document.write(year) Our fixed asset valuation services serve a variety of purposes for our clients, including: Anti-Kickback Statute and Stark Law Compliance These new rules, which significantly amend the existing laws, are a direct result of HHS Regulatory Sprint to Coordinated Care. This safe harbor is intended to provide greater predictability for model participants and uniformity across models. According to CMS in the Final Rule, We continue to believe that this determination should be made from the perspective of the particular parties involved in the arrangement. Another key factor to commercial reasonableness is answering the question: Does the arrangement make sense to accomplish the parties goals? The three types of transactions are asset acquisition, compensation, and rental of equipment or office space. Not that CMS made it easy by providing a bright line or even a floor that would allow us to say, if we go above this level, then we must get a formal thirty-party fair market value opinion. According to CMS, We wish to be perfectly clear that nothing in our commentary was intended to imply that an independent valuation is required for allcompensation arrangements.. The primary regulations governing physician compensation arrangements are the Stark Law and AKS. The regulations will become effective January 19, 2021, with one exception. On March 30, 2020, the Centers for Medicare & Medicaid Services (CMS) issued blanket waivers to the Stark Law that permit certain arrangements between physicians and health care providers implemented in response to COVID-19 that would otherwise violate the Stark Law. The anti-kickback regulations apply only to services reimbursed by Medicare or Medicaid. As stated above in our discussion of fair market value, CMS continues to make it clear that the commercial reasonableness determination is also accomplished through consideration of an arrangements context and from the perspective of those involved. and Don Barbo, Managing Director with VMG Health, on the topic of "New Stark Law and AKS Final Rules -Valuation Considerations." On January 19, 2021, a new era was ushered in as the CMS Stark Law Final Rule and the HHS-OIG Anti-Kickback Statute Final Rule became effective. 5, A regular assessment should be conducted to determine if the healthcare transactions are commercially reasonable. b. In addition, CMS removed the "volume or value" and the "other business generated" standards . 6 Carnahan Group provides a unique platform FMVMD,which allows healthcare organizations to analyze physician compensation arrangements for fair market value and commercial reasonableness instantly. Fair market value, and specifically as it relates to compensation arrangements, is defined as The value in arms-length transaction, consistent with the general market value of the transaction. General market value means with respect to compensation for services, the compensation that would be paid at the time the parties enter into the service arrangement as the result of bona fide bargaining between well-informed parties that are not otherwise in a position to generate business for each other., Commercially reasonable means that the particular arrangement furthers a legitimate business purpose of the parties to the arrangement and is sensible, considering the characteristics of the parties, including their size, type, scope, and specialty.