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February 25, 2009

The importance of being earnest -

- in watching for changes in laws and regulations is demonstrated in U.S. ex rel. Kosenske v. Carlisle HMA Inc., 554 F.3d 88 (3rd Cir. 2009), analyzed in "Third Circuit Rules Outdated Agreements May Lead to Stark Law Violations", a Health Law Client Alert prepared by Drinker Biddle and Reath LLP.  From the introduction:

A decision by the U.S. Circuit Court of Appeals for the Third Circuit finding that a long-standing agreement between a physician group and a hospital was insufficient to protect them from Stark Law violations underscores the need for providers to review and, where necessary, update the written contracts and fair market value determinations used to document compliance with the personal services exception to the federal Ethics in Patient Referrals Act of 1989 (the Stark Law) and the safe harbor to the Medicare and Medicaid Anti-Kickback Statute (the Anti-Kickback Statute).  U.S. ex rel. Kosenske v. Carlisle HMA Inc. – noteworthy because of the limited number of court rulings in this area – highlights the risks where operating relationships under long-standing service agreements between hospitals and physician practice groups have changed over time and no longer resemble the circumstances of the original agreements (e.g., hospital ownership, new facility development, scope of services). 

Clients don't like paying legal fees, especially when they don't see a direct result of the attorney's work.  However, it is for the client's own protection that attorneys must convince them that monitoring statutes and regulations with a direct impact on their business is important for their survival.  EMM

February 25, 2009 in Practitioner Concerns | Permalink

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