STARK LAW EXCEPTIONS AND ANTI-KICKBACK …

1 STARK LAW EXCEPTIONS AND ANTI-KICKBACK LAW SAFE HARBORS Print this page in pdf Cooperative Hospital Service Organizations STARK [No comparable exception ] ANTI-KICKBACK Safe harbor for payments between a cooperative hospital service organization (CHSO) and its patron hospital Both the CHSO and the patron hospital are described in 501(e) of the Internal Revenue Code and are tax-exempt under 501(c)(3.) The CHSO is wholly owned by two or more patron hospitals. If the patron hospital makes a payment to the CHSO, it must be for the purpose of paying for the bona fide operating expenses of the CHSO; or for the purpose of paying a distribution of net earnings required to be made under 501(e)(2) of the Internal Revenue Code. Non-Monetary Compensation Up to $300 STARK STARK exception to the referral prohibition related to compensation arrangements for nominal non-monetary compensation to physicians ANTI-KICKBACK [No comparable safe harbor] Items or services (not including cash or cash equivalents) that do not exceed an aggregate of $300 per year.

2 The compensation is not determined in any manner that takes into account the volume or value of referrals or other business generated by the referring physician. The compensation may not be solicited by the physician or the physician's practice (including employees and staff members). The compensation arrangement does not violate the Federal ANTI-KICKBACK statute or any Federal or State law or regulation governing billing or claims submission. The annual aggregate nonmonetary compensation limit is adjusted each calendar year to the nearest whole dollar by the increase in the Consumer Price Index--Urban All Items for the 12-month period ending the preceding September 30. CMS displays after September 30 each year both the increase in the CPI-U for the 12-month period and the new nonmonetary compensation limit on the physician self-referral website.

3 Where an entity has inadvertently provided nonmonetary compensation to a physician in excess of the limit , such compensation is deemed to be within the limit if-- (i) The value of the excess nonmonetary compensation is no more than 50 percent of the limit; and (ii) The physician returns to the entity the excess nonmonetary compensation (or an amount equal to the value of the excess nonmonetary compensation) by the end of the calendar year in which the excess nonmonetary compensation was received or within 180 consecutive calendar days following the date the excess nonmonetary compensation was received by the physician, whichever is earlier. This option may be used by an entity only once every 3 years with respect to the same referring physician.

4 In addition to nonmonetary compensation up to the limit, an entity that has a formal medical staff may provide one local medical staff appreciation event per year for the entire medical staff. Any gifts or gratuities provided in connection with the medical staff appreciation event are subject to the limit. Discounts: Buyers Who Submit Claims and Sellers Thereto STARK [No comparable exemption] ANTI-KICKBACK Safe harbor for discounts received by a buyer, which submits a claim for payment for the good or service for which payment is made under any federal or state health care plan and sellers to such buyers The buyer is an individual or entity (which is not an HMO or competitive medical plan or a buyer which reports its costs on a cost report) in whose name a claim or request for payment is submitted for the discounted item or service and payment may be made, in whole or in part, under a federal or state health care program.

5 The discount must be made at the time of the sale of the goods or service or the terms of the rebate must be fixed and disclosed in writing to the buyer at the time of the initial sale of goods or services. The buyer, (if submitting the claim) must provide, upon request, to the Secretary of HHS or a state agency, the information required to be provided to a buyer by a seller. Where the seller submits a claim or request for payment on behalf of the buyer and the item or service is separately claimed, the seller must provide, upon request by Secretary of HHS or a state agency information request to be provided to a seller by an offeror. Where the buyer submits a claim, the seller must a) fully and accurately report such discount on the invoice, coupon or statement submitted to the buyer; b) inform the buyer of its obligations to report such discount and to provide information upon request; and c) refrain from doing anything that would impede the buyer from meeting its obligations.

6 [Note that discount "offerors" have similar requirements to sellers; an offeror is an individual or entity who is not a seller but promotes the purchase of an item or service to a buyer]. Discounts: Buyers Who Submit Cost Reports and Sellers Thereto STARK [No comparable exception ] ANTI-KICKBACK Safe harbor for discounts received by a buyer which submits a cost report and sellers to such buyers The buyer is an entity which reports its costs on a cost report required by the Department of HHS or a state health care program. The discount must be earned based on purchases of that same good or service bought within a single fiscal year of the buyer. The buyer must claim the benefit of the discount in the fiscal year in which the discount is earned or the following year.

7 The buyer must fully and accurately report the discount in the applicable cost report. The buyer must provide, upon request, by the Secretary of HHS or a state agency, the information required to be provided to a buyer by a seller. The seller must a) fully and accurately report such discount on the invoice, coupon or statement submitted to the buyer; b) ; b) inform the buyer of its obligations to report such discount and to provide information upon request; and c) refrain from doing anything that would impede the buyer from meeting its obligations. If the value of the discount is not known at the time of sale, the seller must a) fully and accurately report the existence of a discount program on the invoice, coupon or statement submitted to the buyer; and when the value of the discount becomes known, provide the buyer with documentation of the calculation of the discount identifying the specific goods or services purchased to which to discount will be applied.

8 [Note that discount "offerors" have similar requirements to sellers; an offeror is an individual or entity who is not a seller but promotes the purchase of an item or service to a buyer]. Bona Fide Employment Relationships STARK STARK exception to the referral prohibition related to compensation arrangements for bona fide employment relationships with physicians (or an immediate family member of the physician) ANTI-KICKBACK Safe harbor for employment relationships The employment is for identifiable services. The employment is a bona fide employment relationship with the employer. The amount of the remuneration under the employment is: a) consistent with the fair market value of the services; and b) is not determined in a manner that takes into account (directly or indirectly) the volume or value of any referrals by the referring physician.

9 Subparagraph b) herein does not prohibit payment of remuneration in the form of a productivity bonus based on services performed personally by the physician (or immediate family member of the physician). The remuneration is provided under an agreement that would be commercially reasonable even if no referrals were made to the employer.