Laws to Consider in Hospital-Physician Co-Management Agreements

One alternative some physicians are finding to hospital employment is a co-management arrangement between existing physician practices and hospitals.

Driven by changing payment arrangements, including Shared Savings through accountable care organizations and bundled payment models, many organizations are partnering through the alternative co-management model.

The hospital and members of the physician practice typically set up a jointly owned company to manage a service line, according to an article by law firm Akerman Senterfitt, LLP, released last week. The management company and the hospital sign a written agreement about specific job tasks and goals, as well as compensation.

However, the agreement comes with some careful considerations, in which it must follow healthcare statutes and regulations. The article suggests the following laws to consider while making this type of arrangement:

-The Stark Law is aimed at preventing a physician from making patient referrals to organizations in which he or she has a financial relationship. However, there is an exception to the rule if the hospital's compensation to the management company is steady and doesn't vary with patient volume or referrals, according to the article.

-The Anti-kickback Statute is aimed at prohibiting payment for referrals for reimbursable services. If the hospital offers the medical staff member an opportunity for ownership interest in the management company, it may violate the Anti-kickback Statute.

-The Civil Monetary Penalties Statute prohibits a hospital from paying a physician to cut services to patients who are entitled under federal benefits. Therefore, be careful that efforts to meet quality benchmarks do not violate the statute.

In the changing climate for healthcare it is more important than ever for both hospitals and physicians to be open-minded when considering employment models or other alternatives to increase the quality of patient care and to benefit both parties, the physicians and the hospital networks.

Read the full article from law firm Akerman Senterfitt, LLP by clicking here:
http://www.jdsupra.com/post/documentViewer.aspx?fid=cc4b1bfa-e188-4047-802d-12dc4b248f07