Hospital/Physician Engagement: Complying With Stark Law and AKS, Protecting Tax Status, Avoiding Deal Breakers

There are shifting considerations and trends in today’s healthcare market, as hospitals and physician groups reevaluate the benefits and risks of different engagement models. PSAs provide hospitals and doctors an alternative to physician employment. When structured properly, PSAs can align hospitals and contracting medical groups to improve the quality and efficiency of healthcare services and transform fragmented care processes into integrated healthcare models.

More traditional hospital-based service agreements can offer flexibility, although pose their own unique sets of challenges. Counsel must carefully structure each arrangement to achieve physician-hospital alignment while complying with fraud and abuse laws and maintaining tax exempt status.

Listen as our authoritative panel provides an overview of the key legal, business and valuation issues implicated in these arrangements, including Stark law and anti-kickback compliance. The panel will offer best practices for determining the optimal alignment model to use and for getting the deal done.

1. PSAs and Hospital-Based Service Agreements -- Key legal issues
   1. Stark law
   2. Anti-kickback statute
   3. Reassignment rules
   4. Provider based status regulations and “Site Neutrality”
   5. Tax exemption
   6. Antitrust
2. Valuation issues
   1. Determining an appropriate market rate of compensation
   2. Understanding the included elements versus those that are “pass through” items
   3. Perils of compensation stacking and potential redundancy of services
   4. Commercial reasonableness of the selected structure
3. Lessons learned / potential pitfalls

The panel will review these and other mission-critical issues:

• What are the benefits and drawbacks of PSAs vs. other forms of service agreements for hospitals and physician groups?
• What anti-kickback and Stark law issues does each model face?
• What are the best practices for structuring PSAs to avoid jeopardizing the hospital’s tax exempt status?
• What nuances should counsel be aware of with respect to valuations to support compliance?