If you’re a health system and think patient referrals have nothing to do with your real estate, think again. Arm’s length isn’t just for anatomy lessons; it’s necessary to ensure real estate transactions don’t corrupt professional, medical judgement, resulting in fines and criminal charges.
Two intertwined federal laws concern patient referrals influenced by improper financial incentives (ex. below fair market value rents) and are a critical consideration in the management of a health system’s real estate:
For services paid for by Medicare, Medicaid or other state healthcare plans, Stark prevents physician self-referral and patient referral to entities with which the physician has a financial interest or relationship.
Prohibits kickbacks, bribes, rewards and other economic incentives that induce physicians to refer patients for services or recommend purchase of medical supplies that are reimbursable under government-funded healthcare programs.
While we can’t offer advice as legal professionals, consider our Stark/AKS Playbook at the initiation of lease negotiations between physician group and health system. The key to Stark and AKS compliance is adherence to the safe harbors and exceptions, as well as exhaustive documentation. Final compliance decisions are for you and your outside counsel.
Download our complete Stark/AKS Playbook here. After working with outside counsel to ensure you’re above board, call us to help execute your real estate transactions.