Stark & Self-Referral

Overview

We have extensive experience in counseling health care providers, and in structuring provider arrangements and business models, for compliance with Stark law and analogous state laws.

Stark law prohibits entities from billing Medicare for certain “designated health services” referred by a physician (or immediate family member) who has a “financial relationship” with the entity, unless this relationship satisfies a Stark exception. Stark law also prohibits physicians from making such referrals. For purposes of Stark law, a financial relationship is an ownership or investment interest, or a compensation arrangement. Financial relationships may be direct or indirect. Stark law is a strict liability statute, meaning that an arrangement that involves Stark referrals will violate the statute unless it satisfies a Stark exception.

Stark law has been implemented through a “phased” regulatory process occurring over a multi-year period, throughout which various Stark concepts have evolved and been amended. This has led to a complex regulatory framework that represents one of the greatest compliance challenges that health care providers face.

Experience

  • Represented a large regional health system in the corporate restructure of its operations from a Georgia Hospital Authority operated hospital to a restructured, tax exempt not for profit hospital.

  • Represented a national pain management company address state and federal regulatory matters related to acquisitions and subsequent corporate reorganization.

  • Represented a large hospital system in the development of a professional services agreement for the development and offering of general surgery services.

  • Represented a national medical practice and management company in the analysis of various Stark and Antikickback issues related to expansion of the business model and relationships with physicians, health systems and other vendors and providers.

  • Represented a large hospital system in the development of a regional urgent care joint venture arrangement, including tax strategy, corporate structure and regulatory analysis.

  • Represented a large regional health system in the acquisition of a privately held, joint venture ancillary service provider.

  • Represented a large hospital system in the development of a single specialty (hospital-physician) joint venture ambulatory surgery center.

  • Represented a large single specialty physician group in the addition of new shareholders in both the main practice and ancillary lines of business.

  • Represented a single specialty surgery center in the negotiation, diligence, fraud and abuse counseling, and drafting of joint venture with a large regional health system.

  • Represented a national subspecialty services provider and management company in the analysis of related fraud and abuse issues.

  • Represented a national subspecialty services provider and management company in its corporate reorganization and national development.

  • Represented a national subspecialty services provider and management company in the acquisition of related providers.

  • Assisted a large regional hospital system in the development and negotiation of an exclusive provider agreement for hospital based services.

  • Represented a national subspecialty services provider and management company in the development, fraud and abuse counseling, and negotiation of national service line management program and related exclusive service provider agreements.

  • Represented a community hospital in the development and negotiation of an emergency room staffing agreement.

  • Represented a community hospital in the development and negotiation of a hospitalist agreement.

  • Represented a large hospital system in the development of a system-wide, multi-specialty, physician practice acquisition strategy and process; including all documentation and negotiation.

  • Represented a large regional hospital system in the development of a professional services arrangement, including all aspects of the transaction, including due diligence, negotiation of primary agreements, regulatory filings (state and federal).

  • Represented a group practice in the negotiation, diligence, fraud and abuse counseling, and drafting of a professional services agreement with a large regional health system.

  • Serving as health regulatory counsel to private equity group in the acquisition of home health provider, including transfer of all necessary operational licenses. Purchase price was in excess of $5 million.

  • Represented a large hospital system in the negotiation and drafting of a specialty co-management agreement including all corporate transactional agreements and development of applicable co-management measurement metrics in compliance with federal fraud and abuse requirements.

  • Serving as health regulatory counsel to private equity group in acquisition of substantially all of the assets of a national hospital chain. Transaction value in excess of $1 billion.

  • Represented a physician specialty group practice in asset sale to tax-exempt hospital system and related development of a center of excellence. Varied employment arrangements for all acquired providers. Purchase price was in excess of $5 million.

  • Served as lead counsel for a development of regional 20+ physician group practice utilizing clinical integration and financial integration. Transaction included negotiation and establishment of employments agreements, operating agreement and management agreement in compliance with both federal fraud and abuse and anti-trust compliance requirements.

  • Represented a large hospital system in fraud and abuse analysis related to the development and securities offering of multi-specialty ambulatory surgery center.

  • Represented a large hospital system in the negotiation and drafting of a specialty joint venture agreement, including all regulatory analysis and drafting of corporate transaction documents.

  • Represented solo physician specialty practice in asset sale to publicly traded physician management company. Transaction included negotiation and transfer of exclusive services agreement with multiple area hospitals. Development of post-closing contingent compensation system tied to individual physician requirements and needs. Varied employment arrangements for all acquired providers. Purchase price was in excess of $4 million.

  • Represented a 30-physician specialty group practice in stock sale to publicly traded physician management company. Transaction included negotiation and transfer of exclusive services agreement with multiple area hospitals. Development of post-closing agreement on management and policy that included recognition of senior and junior physicians, intra-practice leadership and transition models. Varied employment arrangements for all acquired providers. Negotiation and early termination of office lease, including all physician guarantees. Purchase price was in excess of $70 million.

  • Represented a physician specialty group practice and related ambulatory surgery center in asset sale to tax-exempt hospital system and related development of a center of excellence. Transaction included development of post-closing agreement on management and policy.  Varied employment arrangements for all acquired providers. Purchase price was in excess of $4 million.

  • Counseled home health provider in structuring “house call” service model for Stark/Anti-kickback compliance and satisfying Medicare reimbursement rules.

  • Represented neurology clinic in negotiating and drafting complex agreements with a non-profit health center concerning the use of imaging equipment, personnel, and office space and structuring this arrangement for Stark/Anti-Kickback compliance.

  • Representing a medical practice and real estate development company in the analysis of Stark, federal anti-kickback, state certificate of need rules and corporate practice of medicine rules in conjunction with an analysis of various equity investment options to be made available to physician-investors in a $15 million medical office building and subsequent tenant-based health care service providers (e.g., laboratories, imaging centers).

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