GOAL:

EARLY FINDINGS

• According to Horty Springer (healthcare law expert and legal consultant with 40 years experience), there are no current governmental regulatory guidelines regarding how hospitals or healthcare systems are to "structure gainsharing programs or compensations structures with physicians, who assist hospitals or are part of their Value Based Programs." This has prompted a June 25th request for information on behalf of the CMS regarding Stark Law, as well as the OIG's August 27th request for information.
• According to Centers for Medicare and Medicaid (“CMS”) Administrator Seema Verma, the agency will be examining opportunities to "modernize" Stark Law to move from a more fee per service perspective to Value Based Services . Plans include the following: Periodic audits to assess alignment of compensation structures with fair market value, review of physician compensation models to ensure alignment with fair maret value on varying components (including cash components), and special attention to revenue less expense models. One primary goal is to "redesign of compensation models that are not generating cash compensation at desired market levels or that are not consistent with the organization’s goals."
• In it's request for information, OIG plans to also looking to make sweeping changes to Antikickback laws in accordance with CM's proposed changes to Stark Law. The plans for this are to encourage care coordination for Value Based Care by removing governmental obstacles that prevent coordination. The OIG is specifically interested in examining "(i) The structure of arrangements between parties that participate in alternative payment models or other novel financial arrangements designed to promote care coordination and value; (ii) the need for new or revised safe harbors and exceptions to the definition of “remuneration” under the beneficiary."
• With regards to the IRS 501c3 guidelines, "the PSC and the Parent should have safeguards in place to ensure that compensation of physician employees is reasonable. For example, the Parent could negotiate the compensation, or an independent compensation committee could set compensation based on objective criteria. This may include third party surveys.
• This article, by the American College of Cardiology summarizes the relationship between Stark Law, Antikickback Law, and IRS 501c3 guidelines to ensure compensation consistent with FMV. The combinations of the three regulatory functions provide that " physicians employed by health care organizations be compensated in a manner that does not reflect current or future referrals and stipulate compensation would "make sense" (i.e. is commercially reasonable) if no potential referrals to the organization were at stake. An FMV assessment is required to ensure compliance with these regulations."
• Typically, hospitals engage third party firms to provide an independent FMV "opinion." A number of factors are considered in determining FMV, These include, " the use of multiple survey data regarding regional and national salary trends for a particular specialty displayed as a percentile such as total compensation, work relative value units (wRVUs), $/wRVU, total charges and total collections." 
• Landmark cases involoving vilolation of the Stark Law and Antikickback statute are fairly numeros over the last 5 years. Here are 2 examples:

CLARIFICATIONS NEEDED

• In order to get started on your research, we have noted that pre-compiled listings of all cases involving Stark Law are difficult to find. Even when a database is found, there are numerous cases over time, which do not specifically state violations of FMV. This means that each case would need individual evaluation. Based on this fact, would it be acceptable to start with the most recent, expanding to within the past 5 years as needed? We recommend a time frame of 5 years.

• Also, with regard to presentation of cases, what would you like for us to cover in each case (i.e. the name of the case, the violation, and the outcome)?

PROPOSED NEXT STEPS

• Based on the the plethora of available information. We recommend starting with a review of relevant cases where healthcare systems, and hospitals were in violation of Stark Law and/or the Antikickback Statute as information related to all instances of investigations may only be available by searching each State Board of Medical Providers Individually.

• Depending on the depth level indicated in your clarification we can:

• Based on extensive search, we may not be able to obtain appraisal reports unless they are made available publicly, as these are part of litigation and subject to attorney client privilege. We will look for any CIA's as available during or search.

• We can also provide summaries of 3 to 5 CMS self disclosures within the recommended 5-year timeline. We can do these in sets (3 hours, $75) per set.
• We can perform an analysis of average FMV benchmarks used in determination of physician compensation as found in surveys, or income reporting data by reputable third party firms or as found in professional association surveys, including any comments by industry experts as available (3 hours, $75)
• We can also provide IRS 501c3 violation cases according to the same scoping guidelines presented in for the evaluation of Stark Law cases.