Melissa Jampol Quoted in “Hospital Settles Stark Case for $42M Over Subleases in Physician Clinics, Marketing”

Report on Medicare Compliance

Melissa L. Jampol, a Member of the Firm in the Health Care and Life Sciences and Litigation practices, in the firm’s New York office, was quoted in the Health Care Compliance Association’s Report on Medicare Compliance, in “Hospital Settles Stark Case for $42M Over Subleases in Physician Clinics, Marketing,” by Nina Youngstrom.

Following is an excerpt:

And it won’t take much for the government to figure out when organizations have gone off the reservation, Jampol says. That’s something she learned as a prosecutor with the U.S. Attorney’s Office for the District of New Jersey, and health care organizations should take this to heart. Their financial arrangements are fairly transparent.

“In terms of white-collar investigations, it’s almost formulaic how you do an investigation,” Jampol says. “You can see the money moving very easily when you subpoena records. You see the same amount going out every month from the entity and you are able to figure out how much was paid in rent overall. There are not a lot of variables.”

That’s why both parties—hospitals and physicians— have to keep watch over the terms of their contracts, Jampol says. “Just because everything was done on the front end doesn’t mean the arrangement will be kosher all the way down the line,” she says. “You need to stay on top of your contracts and lease agreements to make sure what’s agreed to is happening in reality.”

When hospitals enter into leases with referring physicians, they should review the lease as a whole, Jampol says. “Identify all space and services included in the arrangement—for example, usable and rentable square feet, utilities, common area, maintenance charges (e.g., janitorial, landscaping, snow removal), furnishings, administrative or other staffing, and IT and other ‘support’ services.”

It’s essential to keep documentation of the deal, including proof that it’s commercially reasonable and fair-market value, Jampol says.