Aristotle once said, “The whole is greater than the sum of its parts.” However, Aristotle wasn’t around during the time of patient referral kickbacks, Stark Laws, and Medicare fraud. The Office of the Inspector General (OIG) has made it clear – when it comes to physician compensation stacking, the whole arrangement is not worth more than, and may not even be equal to, the sum of its parts.
Hospitals and practices are increasingly concerned with both cost containment and regulatory compliance of physician services, and rightly so. When multiple service components or contracts exist with a physician (called stacked compensation or stacking arrangements), the potential for overlap and duplication of payments for services increases dramatically, which can result in Stark Law violations or, at a minimum, lead to greater scrutiny from the OIG.
A comprehensive understanding of all stacked contract components (both individually and collectively) and implementation of a formal contracting process can help ensure compensation is consistent with fair market value (“FMV”) and avoid scrutiny from regulatory authorities.