Stark III: Revisions and Implications
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Under new STARK revisions, owners of a physician organization “stand in the shoes” of his or her physician organization so the arrangement must meet a specific direct compensation arrangement exception. There is no longer an indirect compensation loophole.
Leasing alternatives such as “per click” and “under arrangements” structures that allow a party to own diagnostic equipment, such as imaging equipment, lease it to physicians under a usage structure and bill the government are no longer allowed with new STARK regulations. Block leasing, in which a physician can rent dedicated time on imaging equipment owned by another party, is presently allowed but is also under scrutiny; the government is suggesting it is also subject to its anti-markup provisions which were established to avoid increased billing charges to the government. Hospitals and physicians are required to catalogue and review their joint venture, leasing and service arrangements to assure they are in compliance with these new regulations.
New rules have expanded the definition of a designated health service (DHS) entity to include the entity that "has performed the services that are billed as DHS," even if that entity does not bill Medicare. This change will implicate many existing "under arrangements" ventures where a hospital acquires a previously unavailable service from, or contracts out the operations of an existing department or service line to, a company owned by physicians.
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Source: BOMA Healthcare Conference.
