Compensation. It’s important to review all forms of compensation when considering a job offer, and physicians and others working in healthcare should closely examine their compensation arrangement for potential legal problems. Two major concerns in a compensation arrangement are violations of the Stark law and any anti-kickback statutes.
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September 2022Broadly speaking, these laws protect Medicare and Medicaid from being billed as part of an inappropriate compensation arrangement. The Stark law prohibits physicians from making referrals for certain designated health services payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship, unless an exception applies, and prohibits the entity receiving the referral from submitting claims to Medicare for those referred services. An example of a Stark law violation is a hospital paying doctors to refer otolaryngology patients to their hospital. Because the Stark law operates under strict liability, the intent to profit from an arrangement isn’t required for a physician to violate the law.
The main purpose of negotiations is not to create a winner and a loser, but to create a framework in which everyone involved is headed toward success. —Emily A. Johnson, JD
Federal law and 39 states currently have anti-kickback statutes on their books. These statutes essentially make it illegal to offer or receive anything of value in exchange for referrals of patients who are receiving their benefits from Federal healthcare programs. This could include office space, employee time, bonuses, medications, supplies, other services, and more.
Contract arrangements regarding referrals and compensation can be complex and may often seem innocent to the untrained eye. Unfortunately, a compensation structure that violates these laws cannot be negotiated in good faith. If an arrangement is improper, it must be restructured before anything is signed.
Professional liability insurance. Medical professionals should have professional liability insurance to cover malpractice claims. In addition to knowing what plan your new employer is offering you, it is also important to know what sort of coverage you had in your previous position.
Determine if you have occurrence-based or claims-based coverage. Occurrence-based coverage plans are tied to alleged instances of malpractice. Claims-based coverage plans are tied to when the claim of malpractice is made. If you have occurrence-based coverage, you will be covered for any alleged instances of malpractice that occurred while you were under that plan. Unless you stay with the same insurance company when you switch practices, your claims-based coverage will not cover any claims that originated during your time at the previous practice. You may also need a tail coverage plan to cover you if a former patient asserts that malpractice took place during your previous plan’s coverage period but did not start a claim until after you had left.