Compensation Arrangements With Rock Star Physicians: Key Legal and Fair Market Value Considerations

Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Health
- event Date
Thursday, December 10, 2020
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE course will guide healthcare counsel on rock star physician compensation arrangements. The panel will offer perspectives on identifying "rock star" physicians and will examine Stark Law, fair market value (FMV), and commercial reasonableness considerations. The panel will offer best practices for structuring rock star physician compensation arrangements.
Faculty

Ms. Ferrari has more than 25 years of experience in the healthcare industry in various counsel, consulting and leadership roles. She serves clients inside and outside of Pinnacle, providing assistance with compliance strategy, risk management, due diligence, investigations, and litigation.
Her practice experience is national in scope and includes providing transactional, operational, governance, and dispute resolution support for a broad array of nonprofit, for-profit, and governmental clients, including hospitals and health systems, physicians and physician groups, clinical laboratories, and pharmaceutical and medical device vendors, distributors, and manufacturers. She has assisted clients with structuring, documenting, managing, and, when appropriate, defending financial arrangements involving healthcare providers, often with attention to requirements and implications of the Stark Law, Anti-kickback Statute, False Claims Act, non-profit tax regulations, Foreign Corrupt Practices Act and/or the various state laws concerning billing, payment and corporate practice of medicine. Her work has included assisting clients with mergers and acquisitions, affiliations, joint ventures, public-private partnerships, enterprise-level compliance programs, and healthcare workforce recruitment and management arrangements, including significant incentive, independent contractor, and employment arrangements that exceed $1 million in annual compensation. Her work has also included outside general and special counsel services for healthcare clients, focusing on their contracting and compensation practices.

Mr. Sylla has a decade of experience in helping hospitals and health systems comply with healthcare's fraud and abuse regulatory framework. Specializing in provider compensation arrangements, Mr. Sylla has used that experience to develop compensation plans, investigate and audit provider arrangements, and resolve problematic arrangements with governmental agencies.
Description
Certain physicians are renowned locally, regionally, nationally, or internationally for their specialty areas and/or services. These physicians, sometimes known by the colloquial term "rock stars," may be in demand not only for their clinical services but also for their influence and leadership of other physicians and their ability to attract patients, donors, and research dollars.
Compensation for rock star physicians' services can pose challenging legal and valuation questions for hospitals and other healthcare providers that contract for the rock stars' services. As with other physicians, compensation arrangements with rock star physicians may need to comply with an exception to the Stark law and/or with the prohibitions in the federal Anti-Kickback Statute, as well as with the various state laws that regulate the type, purpose, process, and amount of compensation that may be permissible.
Since many rock star physicians are academic physicians who hold appointments at academic medical centers and teaching hospitals that are not-for-profit, tax-exempt, and/or tax-supported, there are sometimes additional legal concerns related to the obligations and restriction on the payor of the compensation under tax-exemption or public financing laws. For all these reasons, ensuring that rock star physicians' compensation arrangements are reasonable and at fair market value is generally imperative. Yet, given their unusual qualifications and lack of comparability to other physicians, establishing reasonableness and FMV can be a challenge.
Listen as our authoritative panel of healthcare counsel discusses the processes and criteria for identifying rock star physicians. The panel will examine Stark Law, FMV, and commercial reasonableness considerations. The panel will offer best practices for structuring rock star physician compensation arrangements.
Outline
- Identifying rock star physicians
- The potential legal and regulatory pitfalls in compensation arrangements with rock star physicians, including under the federal Stark Law, Antikickback Statute, tax-exemption requirements such as Section 501(c)(3) and the new Section 4960 of the Internal Revenue Code, and various types of state laws
- FMV and reasonableness as appropriate to comply with legal and regulatory restrictions and avoid pitfalls
- Best practices for contracting with rock star physicians.
Benefits
The panel will review these and other key issues:
- What makes a physician a rock star?
- The potential legal and regulatory pitfalls in compensation arrangements with rock star physicians, including under the Stark law, Anti-Kickback Statute, tax-exemption requirements such as Section 501(c)(3) and the new Section 4960 of the Internal Revenue Code, and various types of state laws
- The concepts of FMV and commercial reasonableness as applied to rock star physicians
- Best practices for contracting with rock star physicians
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