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January/February 2012
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Articles
New Restrictions on Per-Click Payments in Lease Arrangements
It’s not uncommon for a hospital or physician group to lease the large medical equipment it uses. In many equipment leases, payments are contracted on a unit of service, or “per-click,” basis. This means that, every time a hospital or physician group uses a leased piece of equipment, it has to pay the lessor.
Currently, Stark Law (governing physician self-referrals) regulations permit per-click payments in equipment leases. This is true even where a physician-lessor receives such payments because the physician is referring patients to a designated health services (DHS) entity (such as a hospital) that is leasing the equipment.
But the Centers for Medicare and Medicaid Services (CMS) has expressed concerns with per-click lease arrangements, believing that they may “reward” physician-lessors for each referral they make. CMS believes such arrangements may lead to overuse. As a result, CMS issued a final rule revising the Stark Law regulations so that equipment leases may not allow per-click payments to a physician-lessor who is referring patients to a DHS entity lessee.
The prohibition on per-click payments will apply regardless of whether the lessor is the referring physician or an entity in which the physician has an ownership or investment interest. It also applies where the lessor is a DHS entity that refers patients to a physician lessee or a physician organization lessee.
Will these restrictions on per-click payments disrupt the introduction of innovative technology to communities? CMS doesn’t think so. In fact, it has encouraged hospitals and other DHS entities to contract with nonphysician entities for such technology or to work with other area hospitals, whereby one hospital could purchase the technology and then contract with the others to enable them to provide the service “under arrangements.”
CMS has delayed the effective date of the revised Stark Law regulations until Oct. 1, 2009, to give parties time to restructure arrangements. Examine your existing lease arrangements with your attorney before the deadline to determine if they will require restructuring to comply with the new rule.
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Felhaber, Larson, Fenlon & Vogt, P.A. |
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