Government Gives Health Care Companies More Leverage in Their Negotiations with Physicians

Recent Cases Demonstrate Potential Exposure for Both Physicians and Providers

Health care organizations that contract with physicians can face potential liability (including millions of dollars in civil, criminal, and administrative penalties), as well as exclusion from participation in federal health care programs, under various laws (such as the Stark Law), the anti-kickback statute, and the False Claims Act (FCA). The exposure frequently arises because physicians bargain hard for the highest possible level of compensation, and the government (or a whistleblower) later alleges that the compensation exceeds fair market value or is not commercially reasonable.

In the past, it usually has been the hospital, nursing home, or other health care company that has been penalized; rarely the physician. Some recent cases provide evidence that this situation is beginning to change, and physicians also could face exposure unless all financial arrangements are defensible as fair market value/commercially reasonable and otherwise meet the requirements of applicable law. Providing information about these cases may help health care providers demonstrate to physicians why compliance is so important, and why compensation cannot be excessive.

* This article was originally published in the Health Care Counsel blog. To read it in its entirety, click here.