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The Centers for Medicare & Medicaid Services announced its sixteenth settlement from a disclosure reported through the Self-Referral Disclosure Protocol for violations of the Stark Law. The disclosure was initiated by an acute care hospital in California that was unable to satisfy the personal service arrangement exception for an on-call physician arrangement. The disclosed violations were settled for $1,600. The government only publishes information related to certain disclosures.

The personal services arrangement exception is the most applicable exception to on-call arrangements with physicians. This exception requires an executed written agreement that describes the services to be performed by the parties. Among other elements, the compensation paid over the term must be fair market value and must not be determined in a manner that takes into account the volume or value of certain referrals.

Compliance with the Stark Law is particularly complex with on-call arrangements because of the difficult of determining fair market value of the compensation. In fact, the government only recently publicly approved providing compensation to physicians for on-call services. The government has been increasingly scrutinizing on-call arrangements due to the difficulty of valuing the services provided and the perceived opportunity to compensate referring physicians for referrals contemplated outside of the on-call arrangement. 

To see the government’s notice of the settlement, click here.