Published August 5, 2020

“Show Me the Money! Auditing Alternative Physician Compensation Arrangements”

Certain alternative compensation arrangements should be on every organization’s internal audit and compliance radar–for important financial and regulatory reasons.

The Office of Inspector General has issued a significant warning that medical director arrangements must reflect fair market value for bona fide services provided to healthcare organizations. These types of compensation arrangements may violate the Stark Law or the Anti-Kickback Statute if even one purpose of the arrangement is to directly or indirectly compensate a physician for his or her past or future referrals of federal healthcare program business. Improper remuneration by a healthcare entity can subject both the physician and the entity to liability under the Civil Monetary Penalties Law.

Similarly, payments made to physicians by pharmaceutical and medical device companies are regulated under the Sunshine Act. For some physicians, the payment amounts can be substantial, bringing into question the influence of the manufacturer on the physician’s medical decision-making.

PYA Principal Tynan Kugler and Senior Consulting Manager Susan Thomas joined Julie Roth of Spencer Fane for a presentation at the virtual AHIA Annual Conference September 20-23, 2020.

In the presentation, they:

  • Described what constitutes a medical director arrangement for healthcare organizations.
  • Explained the implications of Stark Law and Anti-Kickback regulations on medical directorships.
  • Discussed essential elements of the Sunshine Act and the Open Payments database.
  • Designed an audit plan approach for Alternative Physician Compensation Arrangements.

View Slides

If you would like additional information about alternative physician compensation arrangement audits, contact a PYA executive below at (800) 270-9629.

Executive Contacts

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