In general, two of the primary laws that are applicable to recruitment arrangements are: (1) the Federal “Stark” law; and (2) the Federal Anti-kickback law and the accompanying safe harbor for physician recruitment.

FEDERAL STARK –PHSYICIAN RECRUTIMENT EXCEPTION

The Federal Stark law prohibits a physician from making a referral to an entity for the furnishing of “designated health services” (“DHS”) and the entity from submitting a claim for the service if there is a financial relationship between the physician and the DHS entity, unless an exception exists. An exception exists for physician recruitment.; Under Stark, a hospital is permitted to pay a physician to relocate to the hospital’s geographic area in order for the physician to be a member of the hospital’s medical staff.

(2); The arrangement cannot be conditioned on the physician’s referrals;

A hospital is permitted to pay a physician to relocate to the hospital’s geographic area.; In order to meet the relocation requirement, the physician must:

Payments Made to a Physician Who Joins a Group:

(1) The arrangement between the hospital and physician practice is in writing and signed by the parties: in a situation where a physician joins a host practice, the recruitment contract will be a three- party agreement signed by the hospital, recruited physician and host PC or PLLC;

(3) In the case of an income guarantee made by the hospital to a physician who joins a local physician practice, costs allocated by the physician practice to the recruited physician may not exceed the actual additional incremental costs to the practice attributable to the recruited physician;

(4) The new physician must establish a medical practice in the hospital’s geographic area and join the hospital’s medical staff;

(7) The remuneration from the hospital is not determined in any manner that takes into account (directly or indirectly) the volume or value of any referrals (actual or anticipated) by the recruited physician or by the physician practice receiving the direct payments from the hospital (or any physician affiliated with that physician practice;

FEDERAL ANTI-KICKBACK LAW AND SAFE HARBOR

• If a practitioner is leaving an established practice, at least 75 percent of the revenues of the new practice must be generated from new patients not previously seen by the practitioner at his or her former practice.;
• The practitioner agrees to treat patients receiving medical benefits or assistance under any Federal health care program in a nondiscriminatory manner.;