1. This PowerPoint file is a supplement to the video presentation. Some of the educational content of this program is not available solely through the PowerPoint file. Participants should use all materials to enhance the value of this continuing education program.

2. 20711 Physician Deborah Dabbs, MBA, CHC, MT(ASCP)SM has no relevant financial relationships to disclose. Deborah Dabbs, MBA, CHC, MT(ASCP)SM has read and signed a statement of Evidence-Based Content and a statement of Content Validation acknowledging her responsibility to disclose drug products and/or devices with investigative nature, non-FDA approved uses, or off-label uses to TTUHSC and the participants for this activity.

3. 11/30/2013 The accreditation for this program is valid through: Release Date: 12/01/2011 20711 Physician

4. Stark Law: Part 2 If you have any questions about the program you are about to watch, you may call us at: (800) 424-4888 or fax (806) 743-2233. Direct your inquiries to Customer Service. Be sure to include the program number, title and speaker. 20711 Physician

5. Stark Law: Part 2 Deborah Dabbs, MBA, CHC, MT(ASCP)SM Corporate Compliance Coordinator UMC Lubbock, Texas 20711 Physician

6. Objectives 1. Recognize the recent changes and clarifications in the Stark law. 20711 Physician

7. Objectives 2. Identify Stark law concerning compensation/ remuneration. 20711 Physician

8. Objectives 3. Indicate Stark law penalties. 20711 Physician

9. Stark Law Stark II Phase III

10. Stark Law The opinions expressed are those of Centers for Medicare and Medicaid Services (CMS)

11. Objectives Indicate the most important changes and additions made by Phase III

12. Objectives Identify potential future changes to Stark

13. Objectives Recognize that any number of factors can affect the landscape of Stark

14. Entity Amended To include a person or entity performing or furnishing designated health services (DHS)

15. Entity Amended Must be the person or entity that performs the DHS

16. Entity Amended Must be the person or entity that presents a claim for the DHS

17. Services Provided Under Arrangements

18. Services Provided Physician owner of an entity providing DHS under arrangements...

19. Services Provided...(but not billing for those services) may have a non qualifiable...

20. Services Provided...ownership interest in that entity

21. Services Provided CMS prohibited under arrangement agreements between hospitals and physicians...

22. Services Provided...unless they meet a direct compensation exception under Stark

23. Group Practice Modified definition of physician in group practice; includes independent contractors

24. Group Practice An independent contractor physician is only considered a physician in the group practice...

25. Group Practice...when he/she is performing services in the group’s facilities

26. Group Practice Encompasses only members (owners or employees) and independent contractors

27. Group Practice Productivity bonuses could be based directly on incident to services

28. Group Practice Incident to services are incidental to the physician’s personally performed services

29. Group Practice Profits must be allocated in a manner that does not directly relate to DHS referrals

30. Stand in the Shoes A physician organization is defined as:

31. Stand in the Shoes – a physician – professional corporation with a single physician as the sole owner

32. Stand in the Shoes – a physician practice – - a group practice

33. In-office Ancillary Services

34. Physicians sharing a DHS facility in the same building must control the facility...

35. In-office Ancillary Services...and the staffing at the time the DHS is furnished to the patient

36. In-office Ancillary Services Common per-use fee arrangements are unlikely to satisfy...

37. In-office Ancillary Services...the supervision requirements of the in- office ancillary services exception

38. In-office Ancillary Services These arrangements must fully comply with the in- office ancillary services...

39. In-office Ancillary Services...exception in the real world and not just on paper

40. Personally Furnishing Durable Medical Equipment (DME)

41. Fair Market Value (FMV)

42. FMV CMS eliminated the voluntary safe harbor provision within the definition of FMV...

43. FMV...applicable to hourly payments to physicians for their personal services

44. Fair Market Value (FMV) 2 Methods for Calculating

45. FMV Hourly payment to average hourly rate for emergency room (ER) physician services in the relevant market,...

46. FMV...provided at least 3 hospitals with ER services were in the market

47. FMV Based on 50th percentile of national compensation level for physician in same specialty...

48. FMV...using 4 of 6 specified salary surveys and dividing by 2,000 hours to establish hourly rate

49. FMV Providers are responsible for FMV calculations…

50. FMV …blind acceptance of an independent appraisal could land you in the hot seat

51. Intra-family Rural Referrals Consider: Patient's condition, distance to travel, and weather conditions

52. Time Determination Distance Posted speeds Weather conditions

53. Time Determination Physicians choosing to rely upon the 45 minute...

54. Time Determination...alternate transportation time test should maintain documentation

55. Personal Service Arrangements Personal service agreements should not be amended...

56. Personal Service Arrangements...to change compensation paid to physicians

57. Personal Service Arrangements The existing agreement should be terminated and a new agreement,…

58. Personal Service Arrangements...with revised compensation terms, should be entered into

59. Personal Service Arrangements Personal service arrangements are defined as...

60. Personal Service Arrangements...general remuneration from an entity under an arrangement...

61. Personal Service Arrangements...or multiple arrangements

62. Personal Service Arrangements To: – physician – his/her immediate family member

63. Personal Service Arrangements To: – group practice

64. Personal Service Arrangements Includes remuneration for specific physician services...

65. Personal Service Arrangements...furnished to a nonprofit blood center

66. Conditions Each arrangement is set out in writing, is signed by the parties,...

67. Conditions...and specifies the services covered by the arrangement

68. Conditions Arrangement covers all services furnished by the physician to the entity

69. Conditions The aggregate services contracted do not exceed those that are reasonable...

70. Conditions...and necessary for the legitimate business purposes of the arrangement

71. Conditions The term of each arrangement is for at least 1 year

72. Conditions The compensation to be paid over the term of each arrangement is set in advance,...

73. Conditions...does not exceed fair market value, and (except in the case of a physician incentive plan)...

74. Conditions...is not determined in a manner that takes into account the volume or value of any referrals...

75. Conditions...or other business generated between the parties

76. Conditions The services to be furnished under each arrangement do not involve the counseling...

77. Conditions...or promotion of a business arrangement or other activity that violates any federal or state law

78. Conditions A holdover personal service arrangement for up to 6 months...

79. Conditions...following the expiration of an agreement of at least 1 year...

80. Conditions...that met the conditions mentioned is allowed,...

81. Conditions...provided that the holdover personal service arrangement is on the same terms...

82. Conditions...and conditions as the immediately preceding agreement

83. Physician Recruitment Phase III made several changes to this exception

84. Physician Recruitment Allows a hospital to recruit a physician from outside its geographical service area (GSA)

85. Physician Recruitment Does not apply to physicians already on staff in any category of privileges; active or not

86. 75% Zip Code Test The GSA served by the hospital with the smallest number of contiguous zip codes...

87. 75% Zip Code Test...from which the hospital drew at least 75% of its inpatients

88. 75% Zip Code Test Hospitals with service areas may not be able to configure a list of wholly contiguous zip codes...

89. 75% Zip Code Test...meeting the 75% test; those hospitals may use the area of contiguous zip codes that gets them closest to the 75%

90. 75% Zip Code Test Rural hospitals also have the option to increase the percentage to 90%

91. 75% Zip Code Test Rural area or health professional shortage area (HPSA) are allowed to...

92. 75% Zip Code Test...reallocate some existing overhead as part of recruitment arrangement

93. Practice Restrictions No moonlighting No solicitation of patients or employees

94. Practice Restrictions Mandatory acceptance of Medicaid and indigent patients

95. Practice Restrictions Prohibiting use of confidential or proprietary information of the practice

96. Practice Restrictions Requiring the recruit to repay practice losses in excess...

97. Practice Restrictions...of the amount covered by hospital recruitment payments

98. Practice Restrictions Requiring repayment of reasonable liquidated damages...

99. Practice Restrictions...if the recruit leaves the practice but remains in the community

100. Practice Restrictions Imposing a limited reasonable non-compete clause

101. Retention Payments Phase II, physician must have a bona fide written offer

102. Retention Payments Phase III, physician certifies in writing that he/she has a bona fide opportunity...

103. Retention Payments...for future employment at least 25 miles outside the GSA

104. Retention Payments The physician must certify the offer was made

105. Retention Payments CMS will ask the hospital/practice for the certification letter provided by the physician

106. Retention Payments CMS will ask the physician for the proof that the offer was made...

107. Retention Payments...when investigating retention payments

108. Retention Payments Payment may not exceed the lower of an amount equal to 25%...

109. Retention Payments...of the physician’s annual income or the reasonable costs...

110. Retention Payments...the hospital would expend to recruit a new physician

111. Retention Payments The hospital/practice would need documentation showing...

112. Retention Payments...how much it cost to recruit a physician in the same...

113. Retention Payments...or similar field in order to prove reasonable cost

114. Retention Payments Without documentation CMS might take the attitude the hospital/practice...

115. Retention Payments...is paying the physician prohibited remuneration

116. Non-monetary Compensation Phase III permits non- monetary compensation not to exceed applicable limit ($355 in 2011),...

117. Non-monetary Compensation...if it does exceed, the physician repays any excess in the same calendar year...

118. Non-monetary Compensation...or within 180 days after received, whichever is earlier

119. Non-monetary Compensation The DHS entity must have a tracking mechanism

120. Non-monetary Compensation The annual appreciation event must include all medical staff

121. Non-monetary Compensation CMS allows either a celebration for Doctor’s day or a Christmas event

122. Professional Courtesy Allows hospital or provider to offer healthcare...

123. Professional Courtesy...to physicians and families at reduced or no cost

124. Professional Courtesy No longer required to notify insurers of reduction or elimination of co-pay

125. Compliance Training Permits non-monetary compensation for compliance training...

126. Compliance Training...in which a physician receives continuing medical education (CME),...

127. Compliance Training...the primary purpose must be compliance

128. Compliance Training "Other" education may be included but should mostly be compliance education

129. Physician Ownership Physician ownership interest does not include security interest by physician...

130. Physician Ownership...in equipment sold to hospital and financed with loan by physician to hospital

131. Signature Requirements Applies to all signature requirements with exceptions:

132. Signature Requirements – rental of space – rental of equipment – physician recruitment

133. Signature Requirements – FMV – indirect compensation – referral services – obstetrical malpractice subsidies

134. Signature Requirements – retention payments in underserved areas – electronic medical records (EMR)

135. Signature Requirements If non-compliance is inadvertent; 90 days to obtain signature (if not inadvertent, then 30 days)

136. Period of Disallowance Sets the outer limits during which DHS providers can be guaranteed that billing is permitted

137. Period of Disallowance Phase II: the period of disallowance began the date of noncompliance to the date...

138. Period of Disallowance...the relationship or arrangement became compliant or was terminated

139. Period of Disallowance Phase III: period of disallowance begins from the date of noncompliance, but ends no later...

140. Period of Disallowance...than the date on which all excess compensation is returned to the party that paid it

141. Percentage-based Compensation

142. Phase III: no percentage- based compensation

143. Percentage-based Compensation Arrangements were paid on a percentage of revenues realized,...

144. Percentage-based Compensation...thus violating the ban on the volume and value of referrals

145. Per-click Leases No longer permitted in phase III

146. Per-click Leases CMS believed that per-click leases may “reward” physician-lessors for referral

147. Per-click Leases No longer permitted in phase III

148. Academic Medical Centers (AMC)

149. AMC Phase III kept the phase II changes with minor clarifications:

150. AMC – requires the medical staff category used in the numerator be used in the denominator

151. AMC – compensation for each AMC component to a faculty physician must be set...

152. AMC...in advance and not based on volume or value of referrals

153. Implants Furnished in an Ambulatory Surgery Center (ASC)

154. Implants: ASC Exception permits physician owners of ASC to order and perform surgeries that include...

155. Implants: ASC...implantation of durable medical equipment (DME) or other devices

156. Implants: ASC The exception makes clear that the ASC, not the physician, must submit the claim

157. Office Space Rental Rental rate must be set in advance Prorated rental for common areas

158. Office Space Rental May terminate office space lease within 1st year and may enter into new lease for different space

159. Office Space Rental Allocate cost of improvement over life of lease

160. Office Space Rental May impose a holdover premium, may not exceed 6 months

161. Ownership/ Investment Interest in Retirement Plans

162. Ownership/Investment Only retirement plans sponsored by a physician’s employer qualify for Stark exemption

163. Community-wide Health Information Systems

164. Community-wide... Items/services are available to physicians to enable...

165. Community-wide......participation in community-wide health information system

166. Community-wide... Available to all who wish to participate

167. Community-wide... Arrangement does not violate anti-kickback statute (AKS)

168. Electronic Prescribing E-prescribing (eRx)

169. E-Prescribing Nonmonetary remuneration necessary and used solely...

170. E-Prescribing...to receive and transmit electronic prescription information

171. eRx Conditions Hospital to a physician who is a member of its medical staff

172. eRx Conditions Group practice to a physician who is a member of the group

173. eRx Conditions Part D prescription (PDP) sponsor or Medicare Advantage (MA) organization...

174. eRx Conditions...to a prescribing physician

175. eRx Conditions The donor does not take any action to limit or restrict the use or compatibility...

176. eRx Conditions...of the items or services with other electronic prescribing or...

177. eRx Conditions...electronic health records systems

178. eRx Conditions Receipt of items/services is not a condition of doing business

179. eRx Conditions Arrangement set forth in writing

180. Electronic Health Record (EHR)

181. EHR Conditions Items and services are provided to a physician

182. EHR Conditions Software is interoperable

183. EHR Conditions No limits or restrictions on the use, compatibility, or interoperability of items/services...

184. EHR Conditions...with other e-prescribing or EHR systems

185. EHR Conditions Before receipt of items/services, physician pays 15% of donor’s cost

186. EHR Conditions Is not a condition of doing business

187. EHR Conditions Does not take into account the volume or value of referrals

188. EHR Conditions Arrangement set forth in writing

189. EHR Conditions For items or services that are of the type that can be used for any patient without regard...

190. EHR Conditions...to payer status, the donor does not restrict, or take any action to limit, the physician's right...

191. EHR Conditions...or ability to use the items or services for any patient

192. EHR Conditions Items/services do not include staffing of physician offices and are not used primarily...

193. EHR Conditions...to conduct personal business or business unrelated to physician's practice

194. EHR Conditions EHR software contains e- prescribing capability

195. EHR Conditions Does not violate AKS

196. Other Topics

197. Remuneration unrelated to DHS: remuneration must be wholly unrelated to provision of DHS

198. Other Topics Obstetrics malpractice insurance subsidies:...

199. Other Topics...CMS declined to expand this exception to permit subsidies...

200. Other Topics...by all hospitals and for different specialties

201. Other Topics Reporting obligations: much of reported information will be exempt...

202. Other Topics...by all hospitals and for all specialties

203. Other Topics Reporting obligations: discretion with regard to reporting deadlines...

204. Other Topics...and may extend the deadline past the 30 days when appropriate

205. Miscellaneous Specialty hospital moratorium:...

206. Miscellaneous...CMS is exploring changes to the Medicare enrollment form for hospitals

207. Miscellaneous Specialty hospitals are likely to continue to receive heightened attention from CMS

208. Miscellaneous No markup for purchased or reassigned technical and...

209. Miscellaneous...professional services (proposed; not final as of yet)

210. Miscellaneous The only exception to the anti-markup rule is for full-time employees

211. Penalties Stark law is a strict liability statute; do not have to prove intent

212. Penalties CMS may deny payment for a claim that violates the Stark law

213. Civil Monetary Penalties $15,000 for each service, plus up to 3 times the amounts claimed

214. Civil Monetary Penalties Circumvention schemes: up to $100,000 for each such arrangement...

215. Civil Monetary Penalties...or scheme plus an assessment

216. Civil Monetary Penalties False claims actions: $50,000 to $250,000 plus 3x amounts claimed

217. Penalties Good idea to perform a Stark analysis on all agreements

218. Penalties Agreement must also not violate the AKS

219. Stark Law Stark II Phase III

220. 11/30/2013 The accreditation for this program is valid through: Release Date: 12/01/2011 20711 Physician

221. Stark Law: Part 2 If you have any questions about the program you have just watched, you may call us at: (800) 424-4888 or fax (806) 743-2233. Direct your inquiries to Customer Service. Be sure to include the program number, title and speaker. 20711 Physician