Anchor your rental deals in approved safe harbors
April 1, 2000 2 minutes read
Anchor your rental deals in approved safe harbors
How to avoid trouble with rental agreements
Providers who rent space to other physicians and suppliers they refer patients to or otherwise generate business for can immunize themselves from prosecution under the anti-kickback statute by adhering to all of the following safe harbor criteria, says a fraud alert by the Office of the Inspector General:
• The agreement is set out in writing and signed by the parties.
• The agreement covers all of the premises rented by the parties for the term of the agreement and specifies the premises covered by the agreement.
• If the agreement is intended to provide the lessee with access to the premises for certain time intervals instead of on a full-time basis, the rental contract needs to specify the exact interval schedule, the intervals’ precise length, and the exact rent for such intervals.
• The term of the rental agreement is for one year or longer.
• The aggregate rental charge is set in advance, is consistent with fair market value in arm’s-length transactions, and does not take into account the volume or value of any referrals or business otherwise generated between the parties for which payment may be made in whole or in part under Medicare or a state health care program.
• The aggregate space rented does not exceed that which is reasonably necessary to accomplish the commercially reasonable business purpose of the rental.
Arrangements for office equipment or personal services of physicians’ office staff also can be structured to comply with the equipment rental safe harbor and personal services and management contracts safe harbor. Specific equipment used should be identified and documented and payment limited to the prorated portion of its use.
Similarly, any services provided should be documented, and payment should be limited to the time actually spent performing such services.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content