HEALTH CARE LEGAL EAGLE
Physician Contracts Must
Comply with Federal and
State Health Care Laws
By Elizabeth P. Perez, Esq.
One area where these laws impact physicians
is in contractual arrangements with another
physician, a facility, a hospital, or a new ven-
ture. Contracts manage the parties’ expecta-
tions, reduce the likelihood of conflicts, and
can protect your interests. Additionally, they
must be carefully drafted to achieve these
goals. Some of the types of contracts you may
enter into as a physician are
·
employment agreements
·
lease agreements
·
medical director agreements
More importantly, unlike a contract in any
other industry, contracts in the health care
industry must be drafted in such a way as
to ensure compliance with applicable state
and federal laws. For example, contracts
must be compliant with federal Stark and
anti-kickback laws, as well as state laws
prohibiting self-referrals, fee-splitting, pa-
tient-brokering, and kickbacks. A contrac-
tual arrangement that potentially implicates
any of these laws must be analyzed to de-
termine if it falls within a legally recognized
exception or safe harbor that could protect
the physician from prosecution.
If a contract in a health care setting is not
compliant with these laws, the contract may
As future physicians,
you are entering the
new frontier of medicine
because health care
laws and regulations
are constantly evolving.
Health care is said to be
one of the most highly
regulated industries
in the United States,
which it indeed is, to
control, among other
things, quality of care
and health care costs,
while also preventing
fraud and abuse. Conse-
quently, many physicians
are practicing more pru-
dently and taking extra
precautions to avoid the
pitfalls of practicing in
an industry where laws
are ever-changing and
getting stricter over time.
Elizabeth Perez, Esq., is Of Counsel
with the Fort Lauderdale office of the
statewide law firm Broad and Cassel,
where she is a health law attorney.
be unenforceable or, worse, it may expose
the parties to civil fines, criminal penal-
ties, licensure sanctions by the professional
board, and/or exclusion from Medicare
and Medicaid.
The following are some examples of con-
tractual arrangements that must be drafted
to be compliant with federal and state laws:
Employment Contracts
– a physi-
cian’s compensation is highly regulated in
the health care setting to ensure the compen-
sation is not based on making or receiving
patient referrals. It is designed to address
concerns about referrals that may result in
overutilization of health care services, which
presumably increases health care costs.
Leasing Office Space
– a lease must
be at fair market value. If not, it will appear
to be a benefit conferred onto the physician
to solicit patient referrals. This is a perfect
example of how a contract in the health care
industry, even a simple lease, must be draft-
ed to ascertain it is compliant. Otherwise, it
could bring about serious consequences.
Before you sign on the dotted line, I highly
recommend your contractual arrangements
be reviewed to ensure the contract is compli-
ant with current health
care laws and regulations.
Failure to do so could
prove to be a costly mis-
take. Protect your license
and your investment
and hire a good team of
advisers, such as a CPA
and a health law attorney,
to provide advice and
properly guide you.
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COM Outlook . Fall 2013
