John Falcetano (john.falcetano@brooksrehab.org) is Director Corporate Compliance at Brooks Health System in Jacksonville, FL.
A critical element of any effective compliance program is monitoring. As a service to our members, each month this column focuses on potential monitors for specific business lines or functions.
In today’s healthcare environment, compliance professionals must focus on the process that organizations follow in order to comply with rules, regulations, and laws that govern the healthcare industry. Auditing and monitoring activities have always been a key element of any effective compliance program. Compliance professionals frequently conduct audits based on various guidance documents and important metrics of how effectively their organization is complying with regulatory requirements.
The Stark Law prohibits physicians from referring patients for certain designated health services paid for by Medicare to any entity with which they have a “financial relationship.”[1] The federal government interprets the term “financial relationship” as any “direct or indirect ownership or investment interest” by the referring physician as well as the physician’s immediate family members.[2] The government defines the term “immediate family member” to mean a spouse; birth or adoptive parent, child, or sibling; stepparent, stepchild, stepsibling; father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law; grandparent or grandchild; and spouse of a grandparent or grandchild.
While there are many Stark Law risks that can be monitored, today this column will focus on nonmonetary compensation provided to physicians. Under the Stark Law, hospitals can provide nonmonetary compensation to referring physicians but cannot exceed an annual dollar limit. In 2021, the dollar limit is $429.[3] Some of the examples of gifts that hospitals can provide include:
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Entertainment, such as tickets for concerts, sporting events, or the theater;
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Local golf or fishing outing;
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Flowers or similar gifts when a physician or family member is hospitalized;
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Holiday gifts such as coffee mugs, t-shirts, or gift baskets; and
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Business dinner meals.
Besides the dollar limit, nonmonetary compensation cannot be cash or cash equivalents (e.g., gift cards), cannot be solicited by the physician, cannot be determined based on the volume or value of referrals, and cannot violate the Anti-Kickback Statute or any federal or state law or regulation. Failing to comply with the Stark Law as it relates to nonmonetary compensation can be very costly to an organization. During the COVID-19 pandemic, the Centers for Medicare & Medicaid Services has waived penalties for remuneration from an entity to physicians in the form of nonmonetary compensation that exceeds the annual limit to facilitate healthcare workforce participation.[4]
Compliance professionals can easily monitor nonmonetary compensation by requiring management to report any nonmonetary gifts given to providers be reported to the compliance office. The compliance professional can maintain a spreadsheet to track the physician/family member’s name, date, item provided, and value of the nonmonetary compensation to ensure the organization stays in compliance.
