Stark II - Are You in Compliance?

(PYA Alert dated April 6, 2005)

CMS issued its "Phase II" Stark Regulations on March 26, 2004 with an effective date of July 26, 2004. Unlike the Medicare Anti-Kickback Statute, which is a criminal statute requiring at least some determination of criminal intent, the Stark Statute is a civil statute requiring strict compliance. Stark provides for severe penalties including fines between $15,000 and $100,000 or more. Are you in compliance with Stark II regulations? Can you answer all of these questions? Take this short quiz.

• Are your physicians (employed or independent contractors) paid fair market value compensation?
• What are the 11 categories of services subject to referral restrictions?
• What constitutes a financial relationship with an organization providing designated health service (DHS)?
• Does a newly recruited physician with more than one year experience have to relocate his/her medical practice to the hospital's geographic area?
• Have all of your non-compete clauses been voided? Is it documented?
• Must leased space or equipment be used exclusively by the lessee during the contracted times?
• Can you pay all or part of the malpractice premiums for a practitioner who engages in obstetrical practice as a routine part of his or her primary care practice?
• When may a physician sharing space "join" the group?
• Can a physician make a charitable contribution to an entity that furnishes a DHS?

Not sure about all the answers? In this era of policy change, it is important that your organization determine the answers to these questions and how the regulations apply to your unique situation.

PYA understands these issues and has the experience to advise your organization on Stark II compliance matters and fair market value determinations. We, of course, perform our services in close collaboration with your legal counsel. If you currently have Stark concerns, PYA would be pleased to discuss your specific circumstances and how we can help. Please contact Marty Brown at (800) 270-9629.

The information provided via PYA Alert, Tax Planning Alert, or Audit and Accounting Alert should not be construed as accounting, auditing, consulting, or legal advice on any specific facts or circumstances. The contents are intended for general information purposes only.  Please contact us at (800) 270-9629 to discuss your specific situation or to discuss any specific questions you may have.

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