4 Tips to Ensure Compliance in Hospital-Physician Financial Relationships

Here are four tips to ensure compliance in financial relationships between hospitals and physicians.

At the Annual Becker's Hospital Review CEO Strategy Roundtable in Chicago on Nov. 14, Scott Becker, JD, partner with McGuireWoods and publisher of Becker's Hospital Review, discussed key legal concepts in financial relationships between physicians and hospitals.

According to Mr. Becker, when it comes to the financial relationships between physicians and hospitals, issues arise due to three primary causes. These are:

•    One party wanting to get out of the agreement or relationship.
•    An increase in government investigations.
•    False Claims Act lawsuits, brought on by individuals on behalf of the government.

FCA suits are particularly tricky because hospitals are now seeing both traditional and non-traditional false claim allegations, said Mr. Becker. The traditional suits involve billing and getting paid for a service providers at the hospital did not perform. But now, even a violation of the Stark Law or the Anti-Kickback Statute can translate or lead to a FCA suit. "It is the non-traditional false claims suits that are giving hospitals concerns," said Mr. Becker.

Mr. Becker also discussed some tips to ensure hospital-physician financial relationships comply with these federal statutes.

1. Bona-fide employment. Under both Stark and Anti-Kickback statutes, there are strong exceptions for bona-fide employees. "This is one of the many reasons hospitals want to employ physicians now," said Mr. Becker. "Legally, it is a comfortable option for hospitals."

2. Reasonable payment. Hospitals can choose to pay physicians based on their productivity, but they need to ensure they have the data to support that decision. "If you have a physician who is off the charts in terms of productivity, there is nothing wrong in paying that physician on the basis of productivity," said Mr. Becker. But hospitals should be able to support the physicians' productivity and the pay he or she is receiving with reports and solid data, he added. Also, those physicians have to be able to keep up high productivity to continue getting the high pay.

3. Proper documentation. Hospitals must ensure all financial relationships with physicians are carefully documented and supported with solid data, said Mr. Becker.

4. Culture of compliance. "You want everyone, from the leadership down, to try and do the right thing," said Mr. Becker. Every member of the organization should believe they are part of a healthcare facility that strives to be compliant.

Ensuring compliance with federal statutes, particularly with regard to financial relationships with physicians, is a must for hospitals. The stakes and the price of non-compliance is too high, said Mr. Becker.

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