Introduction
The stark law does not allow a physician with any fiscal connection in an entity from developing a referral for selected health services that are covered by Medicare as well as Medicaid to that entity. This covers even the services that have been billed to a person or another third party client. The anti-kickback rules are only applicable to services compensated by Medicare or Medicaid (Office of Inspector General, 1999).
Joint Ventures in Healthcare
In regard to joint ventures within the undeserved areas, the health care ventures in most instances experience difficulties in getting the required capital in addition to getting the best sources of capital. The ventures that are underserved can’t fit within safe harbour small joint ventures since safe harbour restricts physician ownership and the payments that can be gotten from physician investors. In the underserved area mutual enterprise, safe harbour relaxes numerous conditions in active joint venture safe harbour (Anonymous, 1993). The safe harbour allows a higher proportion of physician investors, 50 percent and unrestricted payments from referral resource investors. The current safe harbour includes joint ventures in the areas that are underserved in urban and rural areas. To be eligible, a venture ought to be situated within a medically underserved region, according to Department rules and should serve about 75% medically underserved patients (Fisher, 1997).
Importance of harbour safeguards
The safe harbour safeguards investments by physicians within their own group operations, in case the group operation fulfils the physician investments in single operations where the operation is carried using the single practitioner’s professional firm or other separate lawful body. The safe harbour does not safeguard investments done by group operators or member of group operations in subsidiary services’ joint venture, even if such joint ventures might be eligible for safeguarding under other safe harbours (Centers for Medicare and Medicaid Services 2005).
The safe harbour safeguards particular arrangements when a personal or enterprise consents to refer a patient to another person or enterprise for specialist services in return for the party to get the referral to refer the patient back at a particular time under some specific conditions. A safe harbour does not safeguard arrangements that consist of parties that separated a global charge from a centralized program. The safe harbour necessitates that referrals be clinically suitable, instead of being based on subjective dates or time frames (Altshuler, 2008).
In regard to cooperative hospital groups, safe guard safeguards such organizations under section 501 (e) of Internal Revenue Code. These organisations are the ones that have been developed by either two or more tax-excepted hospitals, referred to as patron hospitals to offer particularly spelt out services, like buying, billing and clinical service exclusively to the advantage of patron hospitals. The safe harbour protects revenues from patron hospital to cooperative hospital groups to support the cooperative hospital groups running expenses and payments from cooperative hospital groups to a patron hospital that are necessary in accordance to IRS regulations (Information Issued By U.S. Attorney’s Office).
Recommendations
- Sundown Community Hospital can decide to form one corporate with Central Park Medical Group instead of having a joint venture.
- After forming the joint venture, the two parties can decide to locate their venture within an underserved area either in urban or in rural areas.
- Sundown Community Hospital should consider forming collectively a global fee from a centralized program.
- Moreover, Sundown Community Hospital should ensure that all referrals it makes are clinically suitable and the referrals should not be based on subjective dates or time frames.
References
Altshuler, M. et al. (2008). Health Care Fraud. The American Criminal Law Review, 45(2), 607-664.
Anonymous (1993, January). Insurer’s ‘most wanted’ list of fraud types. Employee Benefit Plan Review. 47 (7), 45.
Centers for Medicare and Medicaid Services (2005). The New Medicare Prescription Drug Program: Attacking Fraud And Abuse.
Fisher, M. J. (1997, June). Two year fraud battle waged by HHS finds federal government is owed $188 million. National Underwriter (Life & health/financial services ed.) 101 (22), 30.
Information Issued By U.S. Attorney’s Office For The Southern District Of Florida: Jury Convicts Miami Defendant In Health Care Kickback Case. US Fed News Service. Washington, D.C.: Nov 3, 2006 pg. n/a.
Office of Inspector General (1999). Federal Anti-Kickback Law And Regulatory Safe Harbors. Web.