Mr. Wade explains hospitals often overlook the importance of closely monitoring remunerations, which is basically any payment, discount, forgiveness of debt or any benefit including non-monetary compensation, which includes items as simple as mugs or football tickets.
Although hospitals are allowed to distribute non-monetary compensation to referring physicians, there is a yearly cap. Stark Law prohibits non-monetary compensation of more than $355 per year per referring physician. The law deems any non-monetary compensation more than the $355 cap as a prohibited “financial relationship” with the hospital (unless another exception applies), which then prohibits the physician from making referrals to the hospital for any designated health services and prohibits the hospital from billing Medicare for the services provided from such referrals. Mr. Wade warns hospitals that calculating the value of non-monetary remuneration does not necessarily equate to its face value.
“Let’s say I am a hospital CEO with four tickets to Bulls games. I go up to a referring physician and offer the tickets to them because my wife and I decided not to go, and the referring physician decides to take the tickets,” Mr. Wade says. “Say the tickets were valued at $50 each because I bought a large number of tickets. Well, that’s still considered a financial arrangement and blows the $355 cap because those four Bulls tickets, in fact, have a face value of $100 per ticket, or $400 total. I’ve heard from countless hospital CEOs that there is no way they could be giving out more than $355 in non-monetary compensation to physicians, but it’s possible and the risk to the hospitals can be huge. That’s why they have to monitor all financial arrangements to ensure compliance to Stark.”
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