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    Comparison Chart of Anti-Kickback Safe Harbors and Stark Exceptions -- Retention Payments in Underserved Areas

    Retention Payments in Underserved Areas – Current as of November 2017

    Stark
    Stark exception related to compensation arrangements for retention payments in underserved areas  Click the above link to see how this section was amended in January 2016.  The amendments are also incorporated in the text below.

    Anti-Kickback
    [No comparable safe harbor]

    Remuneration is provided by a hospital directly to a physician on the hospital's medical staff to retain the physician's medical practice in the geographic area served by the hospital.

     

    The physician has a bona fide firm, written recruitment offer or offer of employment from a hospital, academic medical center or physician organization that is not related to the hospital making the payment, and the offer specifies the remuneration being offered and requires the physician to move the location of his or her medical practice at least 25 miles and outside of the geographic area served by the hospital making the retention payment.

    In lieu of a bona fide written offer, the physician furnishes to the hospital before the retention payment is made a written certification that the physician has a bona fide opportunity for future employment by a hospital, academic medical center or physician organization that requires the physician to move the location of his or her medical practice at least 25 miles and outside the geographic area served by the hospital and the certification contains at least the following-- (A) Details regarding the steps taken by the physician to effectuate the employment opportunity; (B) Details of the physician's employment opportunity, including the identity and location of the physician's future employer or employment location or both, and the anticipated income and benefits (or a range for income and benefits); (C) A certification that the future employer is not related to the hospital making the payment; (D) The date on which the physician anticipates relocating his or medical practice outside of the geographic area served by the hospital; and (E) Information sufficient for the hospital to verify the information included in the written certification; and the hospital takes reasonable steps to verify that the physician has a bona fide opportunity for future employment that requires the physician to relocate outside the geographic area served by the hospital.

     

    All requirements of the Stark exception for physician recruitment are met.

     

    Any retention payment is subject to the same obligations and restrictions, if any, on repayment or forgiveness of indebtedness as the written recruitment offer or offer of employment. This requirement does not apply in the case of a certification of employment.

     

    In the case of a bona fide written offer, the retention payment does not exceed the lower of-- (A) The amount obtained by subtracting the physician's current income from physician and related services from the income the physician would receive from comparable physician and related services in the written recruitment or employment offer, provided that the respective incomes are determined using a reasonable and consistent methodology, and that they are calculated uniformly over no more than a 24-month period; or (B) The reasonable costs the hospital would otherwise have to expend to recruit a new physician to the geographic area served by the hospital to join the medical staff of the hospital to replace the retained physician.

    In the case of a certification of employment, the retention payment does not exceed the lower of-- (A) An amount equal to 25 percent of the physician's current annual income (averaged over the previous 24-months), using a reasonable and consistent methodology that is calculated uniformly; or (B) The reasonable costs the hospital would otherwise have to expend to recruit a new physician to the geographic area served by the hospital to join the medical staff of the hospital to replace the retained physician.

     

    The physician's current medical practice is located in a rural area or HPSA (regardless of the physician's specialty) or is located in an area with demonstrated need for the physician as determined by the Secretary of HHS in an advisory opinion; or (B) At least 75 percent of the physician's patients reside in a medically underserved area or are members of a medically underserved population.

     

    The hospital does not enter into a retention arrangement with a particular referring physician more frequently than once every 5 years.

     

    The amount and terms of the retention payment are not altered during the term of the arrangement in any manner that takes into account the volume or value of referrals or other business generated by the physician.

     

    The arrangement does not violate the anti-kickback statute or any federal or state law or regulation governing billing or claims submission.

     

    The above requirements apply to remuneration provided by a federally qualified health center or a rural health clinic in the same manner as it applies to remuneration provided by a hospital.