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When Is a Written Agreement Not Required under Stark

CMS`s updates to stark law regulations bring welcome clarity and flexibility to a regulatory system that has lacked both in the past, sometimes leading to draconian results. A definite outcome of the new rules will be to reduce disclosures – and thus the current backlog of CMS – under the agency`s Self-Referral Disclosure Protocol (SRDP). CMS`s comment repeatedly refers to the lessons learned by the SRDP Agency, implicitly acknowledging that the scope of previous Stark regulations has trapped many agreements that posed little or no significant risk of abuse. While the new rules hardly amount to a repeal of this regime, at least health facilities and their lawyers will find it easier to find their way to comply. There are many exceptions to the Stark Act that can benefit your doctor`s office. Learn what these exceptions are and how to implement them. Please contact our health and stark lawyers to understand your options. We are exceptional and respected stark law lawyers. Emanuele is the first time a federal court has had the opportunity to interpret and apply the 2016 amendment to cmS regarding the writing requirement. It cannot be stressed enough that the written requirement is essential to ensure compliance with exceptions and avoid liability under Stark. While the language transition to an «agreement» to relieve health care providers of the need to strictly maintain and update written agreements, the collection of contemporary writings must still include the minimum requirements set out in the regulation, in particular a signature. Without meeting these requirements, health care providers can be held liable under Stark and the FCA, as federal courts are likely to continue to interpret the written requirement to arrive at the «basis for negotiation» between health care providers and CMS. It should also be noted that CMS also noted that while nothing in the fair return at market value exception requires renewals to be made in writing, the parties must be able to provide written documentation indicating that the agreement was renewed on the same terms as the original agreement.

With respect to the perpetual suspension provisions, CMS pointed out the following: CMS also pointed out that an agreement that prima facie appears to promote a legitimate business objective of the parties may not be commercially reasonable if it merely duplicates another legitimate agreement. As an example, CMS provided a medical management agreement that duplicates another existing administrator agreement and is therefore not necessary. It is important to note that the exception can be used for limited reimbursement from a physician in conjunction with other exceptions. For example, the exemption could be invoked to cover the first $5,000 in compensation under an agreement, whereas an agreement does not have a required written agreement. Then, another exception could be invoked once a written and signed agreement is obtained. By coordinating exceptions in this way, it may be possible to shorten the period of non-compliance or eliminate the non-compliance altogether. Significantly, no written form is required and remuneration does not need to be determined in advance or otherwise agreed. In addition, paid items or services must not be provided by the physician personally, but may be provided by an employee or contractor of the physician or physician`s office. In most cases, a single written document recalling the key facts of an agreement is the safest and easiest way to determine compliance with the applicable exemption. However, the Physicians Self-Referral Act does not require that an agreement be documented in a single formal contract.

Depending on the facts and circumstances of the agreement and the documents available, a collection of documents, including contemporary documents proving the conduct between the parties, may satisfy the written requirement of lease exceptions and other exceptions that require a written agreement. CMS explained in its commentary that these initial remuneration terms do not need to be set out in writing to be considered «predetermined» as long as they have actually been agreed before the supply of goods or services for which compensation is paid. Stark`s regulations include a provision that compensation is «predetermined» if it is reduced to a written version and stated in sufficient detail prior to the provision of services, but CMS stated in the commentary that compliance with the «determinative» provision is not required for the initial compensation terms to be considered «predetermined.» CMS also clarified that compensation can be changed prospectively without the need to renew the agreement for one year (which CMS`s previous comments had led some to assume) and that there is no limit to the number of times the parties can revise the compensation as long as they meet the «predetermined» requirements each time (provided that: that the term «predetermined» is an element of the relevant exception). Stand in your place. CmS has completed the proposed revisions to clarify that a physician who stands in the place of his or her medical organization has met the requirement to sign an applicable exemption if the medical organization`s signing authority has signed the letter. For purposes other than the obligation to sign, all physicians in a physician organization are considered «parties» to the indemnification agreement. It seems that cmS intended this to mean that the remuneration between a DHS entity and a physician organization cannot be determined in a way that takes into account the volume or value of referrals or other business generated by a physician in the physician organization, including physicians who are not in the place of the physician organization. [13] Temporary non-compliance with signature requirements. CMS completed its proposal without revision to give a company 90 days to obtain the required signatures, whether the non-compliance is unintentional or not. [12] Previously, a company only used a 30-day grace period to comply with compliance if the error was not unintentional. Companies can only continue to apply this exemption once every three years per doctor or group of doctors. CmS has revised the definition of «designated health services» (DHS) so that services ordered by a physician for a hospital hospital but do not increase reimbursement from a hospital`s Prospective Payment System (PPS) are not considered DHS.

CMS offers the example of a specialist who is consulted in hospital and orders an imaging examination. If the imaging examination does not increase the reimbursement of the PPS of the hospital`s inpatients, the radiological test will not be considered DUS, although it would otherwise fall into the «hospital inpatient services» category of the DHS. This revised definition applies to inpatient PPS, INPATIENT Rehabilitation PPS, INPATIENT Psychiatric Facilities PPS, and Long-Term Nursing Facility PPS, but not to referrals to an outpatient hospital reimbursed under the Outpatient PPS. In a commentary, CMS confirmed practitioners` long-held belief that this exception includes an agreement to resolve a dispute in good faith. However, CMS warns that if the underlying agreement that led to the dispute does not fit an exception, the settlement agreement does not clean up the underlying agreement. In addition, CMS clarified (contrary to the opinion of some) that the exception cannot be used for a party making a one-time payment for services that are provided multiple times. This exception is a vast catch-all exception. It is often used when other exceptions do not apply Ordering an item or service for an inpatient already admitted would increase reimbursement under the PPS inpatient reimbursement systems if the care provided to the patient is eligible for outliers.

As a result, services referred to these patients may continue to be classified as «designated health services» even if they do not relate to the diagnostic group assigned to inpatient admission. Recently, in the United States ex rel. Emanuele v. Medicor Assocs., 242 F. Supp.3d 409, 431 (W.D. Pa. 2017), revision refused, No. CV 10-245, 2017 WL 3675921, the U.S. District Court for the Western District of Pennsylvania issued a statement clarifying that stark law still requires signed written agreements to meet safe harbor requirements.

Application of the materiality standard in Universal Health Services v. United States ex rel. With respect to the «writing requirement» used in various exceptions to the Stark Act, the District Court noted that this requirement, and in particular the requirement to sign, is an essential part of the Stark Act for the purpose of establishing liability under the Federal False Claims Act (FCA). In order to avoid different standards, CMS also refused to adopt commentators` suggestions that the principles of state contract law determine whether an agreement is written. With respect to the requirement to sign the applicable exceptions, CMS clarified its current policy that the agreement must be signed by the parties to comply with the exception and that a signature is required on a competing document documenting the agreement. .

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