In an article published by the Association of Healthcare Internal Auditors (AHIA), Tynan Kugler, Principal, discusses regulatory and financial implications of hospital-physician subsidy arrangements.
Health systems and hospitals often support private practice providers in the form of financial subsidies in certain circumstances, Kugler explains. In the article, she discusses the challenges many hospital-based specialties face, particularly anesthesiology, radiology, pathology, emergency medicine, and hospital medicine, related to being able to compensate providers at fair market value and covering related practice expenses.
Kugler states:
“While subsidies can help support medical providers financially, they must comply with regulatory requirements, specifically the Physician Self-Referral Law (i.e., Stark Law) and the federal anti-kickback statute, which regulate financial relationships between hospitals and physicians. These laws restrict hospitals from providing compensation that could be seen as inducements for physician referrals unless certain exceptions or safe harbors are satisfied.”
She discusses factors that impact subsidies, including the No Surprises Act, Medicare reimbursement, payer mix, program size, and others. Kugler also provides a helpful checklist for effectively evaluating the appropriateness, compliance, and integrity of subsidies as well as considerations related to commercial reasonableness.
The full article was published in the Vol. 43, No. 3 issue of the AHIA New Perspectives journal, where it is available to AHIA members and subscribers. View a PDF of the AHIA article.
On Sept. 11, Kugler presented on the topic at the 2024 AHIA Virtual Annual Conference.
AHIA is “the only professional, specialized association for healthcare internal auditors,” according to its website. The international association helps the auditing community assess and evaluate risk, manage healthcare governance, and direct internal controls through knowledge- and resource-sharing for professionals in a variety of disciplines.
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