The ‘Practice Losses’ Theory as an Enterprise Risk

By on December 9, 2015
Posted In Stark

Three recent, significant FCA settlements with hospitals involving Stark law allegations may also have unexpected governance implications. To varying degrees in these settlements, the Department of Justice (DOJ) appears to advance the highly controversial position that the Stark law is violated when a health system pays employed physicians more than the net professional income the physician generates. While DOJ has in the past expressed skepticism regarding health system tolerance for practice losses, the formal pursuit of such an enforcement theory could be fundamentally problematic to the continued operation of an integrated delivery system. Thus, this enforcement theory is precisely the type of information that would benefit from disclosure to system leadership through the board’s enterprise risk management process.

Read the full article from Bloomberg BNA Health Care Fraud Report™.

Michael W. Peregrine
Michael W. Peregrine represents corporations (and their officers and directors) in connection with governance, corporate structure, fiduciary duties, officer-director liability issues, charitable trust law and corporate alliances. Michael is recognized as one of the leading national practitioners in corporate governance law. Read Michael W. Peregrine's full bio.