Problem 1
– Determining Whether a Financial Relationship Exists
Dr. Thompson is a neurologist who provides care in Mainstreet, Indiana. She owns her own practice, but costs to maintain her MRI equipment are increasing. She is considering using space at St. Vincent Hospital and sending patients that require MRI or other imaging procedure to St. Vincent’s radiology department. Her longtime friend, whom she met in medical school, is the CEO of St. Vincent’s and told her she can use the space for a while until her practice recovers.
Does Dr. Thompson have a financial relationship with St. Vincent Hospital?
Does Dr. Thompson refer patients to St. Vincent Hospital?
What if Dr. Thompson does not see Medicare or Medicaid patients?
Do you think Dr. Thompson has violated the Stark Law? Why?
How would you fix this?
Problem 2
– Determining Whether a Lease is Compliant [continued facts from above]
On advice of counsel, Dr. Thompson decided to sign a lease with St. Vincent’s Hospital while she uses their space. The agreement is in writing and signed by Dr. Thompson and St. Vincent’s CEO. The term of agreement is for one year and three months. Dr. Thompson and her friend, the CEO, agree that the lease price will be $5,000 for the first month but that they will renegotiate the price each month. Additionally, the space used by Dr. Thompson has much more space than she needs, but the CEO wants to make her feel comfortable.
Does this lease agreement comply with the Rental of Office Space Exception?
How would you modify the agreement?
Problem 3
– Determining Whether a Physician Service Arrangement is Compliant [fact continued]
After working with counsel to modify Dr. Thompson’s lease, St. Vincent’s CEO suddenly needs a neurologist to practice at one St. Vincent’s off-campus departments. The CEO only needs someone three days per week, and Dr. Thompson needs to pay off her medical school debt, so she agrees to fill the position. The CEO agrees to pay Dr. Thompson $37 ($39 per patient is the average in the area) for each patient she sees. The term is one year and six months and only applicable to services performed at the off-campus location. Dr. Thompson and the CEO ask counsel to write the contract, and then they both sign a written copy.
Does the agreement comply with the Stark Law?
If so, under what exception? What if the only evidence of an agreement was Dr. Thompson and the CEO’s handshake?