Recent Publications
June 9, 2009
Reminder - Per Click and Percentage Leases Face Restructuring Under Stark Law
Thomas
D.
Anthony,
Joseph
L.
Ardery,
Billy
J.
Mabry
The Centers for Medicare and Medicaid Services are requiring that leases of office space or equipment involving physicians and entities to which they make Medicare or Medicaid referrals restructure two types of payment arrangements before October 1, 2009.
The first is leases of office space or equipment using a formula for rent based on per-unit of service charges, to the extent that the charges reflect services provided to patients referred between the parties. These arrangements are often referred to as "per click" charges.
The second is leases of space or equipment using a formula for rent based on a percentage of the revenue raised, earned, billed, collected, or otherwise attributable to the services performed or business generated in the office space or using the equipment.
These new rules will become part of the regulations under the Stark Law effective October 1, 2009. CMS declared these arrangements to be "inherently susceptible to abuse" back in August 2008. It announced that it would give health care organizations and physicians until the end of September 2009 to restructure their lease arrangements using these types of provisions.
In view of the impending deadline, health care organizations and physicians should review all of their lease arrangements to assure compliance with the new rules before they take effect.
As always, there are nuances subject to interpretation, and each situation must be reviewed on a case-by-case basis.
Please contact
Thomas D. Anthony,
Joseph L. Ardery or
Billy J. Mabry in the Frost Brown Todd
Health Law Practice Group if you have questions regarding this Client Update.