Avoid Legal Pitfalls in Developing Innovative Physician-Hospital Payment Structures

While consolidating in times of extreme uncertainty may be wise business, such relationships can also leave physicians and providers under increased regulatory scrutiny and leave hospitals open to potentially devastating consequences such as antitrust violations, the loss of 501(c)(3) status, and even closure.

Even if a deal receives safe harbor under a Stark analysis, it might not pass the sniff test under the Federal Anti-Kickback Statute, especially if a physician involved in the practice wants to invest in the newly structured entity.

the best ways to protect yourself from falling prey to one of these many traps is to be conservative in marketing, allocating value, and aligning incentives between the providers and the healthcare system — and get an independent consulting group to deliver a written opinion letter on the deal’s fair market value. Even then, if it feels too good to be true, it probably is.