professional corporation (PC) allegedly
violated the Stark Law. In defense of these alle-
gations, the defendants unsuccessfully relied
on several Stark Law exceptions that contain
the writing requirement.
Defendants produced a signed written
agreement to evidence the arrangement
between the urgent care entity and the PC
and argued that the contract evidenced their
compliance with the writing requirement.
However, the Court found issues with the
contract, primarily due to ambiguities concerning the signatures on the agreement and
the identity of the parties to the arrangement.
Although the agreement
was signed, the identity of
the individuals and their
capacity to sign on behalf
of the defendants was
unclear. The Court noted
that the name of the individuals was not printed
next to the signatures.
Additionally, the con-
tract had several blank
fields where the name of
the PC should have been
inserted. Due to this over-
sight, the Court could not
confirm that the agreement was intended to
document an arrangement between the urgent
care entity and the PC. If the template for the
agreement was used for corporate entities
as well as individuals, the failure to identify
the PC in the blank fields could evidence an
arrangement with the physician in his/her
individual capacity. Even assuming the profes-
sional corporation was intended to be a party
to the agreement, it was unclear whether the
physician who signed the contract had the
authority to bind the professional corpora-
tion. Without specifying the PC’s name and
the title of the physician-signatory next to a
signature, the Court could not confirm that
the agreement adequately documented the
arrangement between the parties at issue.
These cases emphasize the importance
of proper documentation and contract management protocols. Compliance personnel
should incorporate the writing requirement
when developing protocols for analyzing and
reviewing hospital–physician relationships.
Free parking services and
A hospital’s provision of items or services to
physicians on a free or at below-market rate
is a long-standing compliance risk area. A
recent court case displays
the potential risks of pro-
viding free parking to
physicians under a leasing
arrangement. In United
States ex rel. Bingham v.
BayCare Health Systems, a
hospital allegedly induced
referrals by providing phy-
sicians with free access to
the hospital’s garage and
the free use of valet ser-
vices. 5 These perks were
provided to physicians
who were employed by an
organization that had a written lease agree-
ment with the hospital. Ultimately, the Court
ruled in favor of the hospital, finding that
there was no evidence of a direct compensa-
tion arrangement between the hospital and the
physicians who received free parking.
Nonetheless, this case emphasizes the
importance of considering every aspect of
physician-hospital arrangements, including
any tangential items or services provided to
physicians outside of the written agreement.
Leasing arrangements can qualify for a Stark
Law exception, provided that the parties
specify the entirety of the premises and ser-
vices provided under the written agreement.
A hospital’s provision
of items or services
on a free or at
is a long-standing
compliance risk area.