Real estate arrangements between health systems and referring physicians face numerous compliance pitfalls that can trigger a violation under the Stark Law.
The compliance pitfalls associated with real estate lease arrangements can be generally subdivided into two categories:
Transactional compliance pitfalls stem from the real estate arrangement itself and the specific structure of the transaction.
Operational compliance pitfalls stem from the subsequent administration, or lack thereof, of the real estate lease arrangements.
Structuring lease arrangements properly and in compliance with the Stark Law is only “half the battle.” The proper administration of the lease arrangement is just as important. A lease arrangement that is structured in perfect compliance with the healthcare regulations can easily expose health systems to compliance violations if the arrangement is not properly administered.