Physician Non-Monetary Compensation and Incidental Medical Staff Benefits

1. Physician Non-Monetary Compensation and Incidental Medical Staff Benefits

2. Background – Stark Prohibition The basic prohibition of the Stark Law is that a physician may not make a referral for the furnishing of a designated health service (DHS) if the physician, or a member of the physician’s immediate family, has a financial relationship with that entity.

3. Background – Stark Prohibition Designated Health Services • Clinical laboratory services • Physical Therapy, Occupational Therapy and Speech-language pathology services • Radiology and certain other imaging services, including MRI, CT and Ultrasound • Radiation Therapy services and supplies • Durable medical equipment and supplies

4. Background – Stark Prohibition Designated Health Services • Parenteral and enteral nutrients, equipment and supplies • Prosthetics, orthotics and prosthetic devices and supplies • Home health services and supplies • Outpatient prescription drugs • Inpatient and outpatient hospital services • Nuclear Medicine

5. Definition - Recipient Recipient shall mean physician who is a member of the medical staff of any Alegent Health hospital (“Provider’) and an immediate family member or member of a physician’s immediate family.

6. Definition - Recipient Family member means husband or wife; birth or adoptive parent, child, or sibling; stepparent, stepchild, stepbrother, or stepsister; father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law; grandparent or grandchild; and spouse of a grandparent or grandchild.

7. Definition - Provider Provider shall mean any Alegent Health Hospital • Alegent Health Bergan Mercy Medical Center • Alegent Health Mercy Hospital, Council Bluffs, IA • Alegent Health Immanuel Medical Center • Alegent Health Lakeside Hospital • Alegent Health Midlands Hospital • Alegent Health Mercy Hospital, Corning, IA • Alegent Health Community Memorial Hospital, Missouri Valley, IA • Alegent Health Memorial Hospital, Schuyler, NE

8. Definition – Non-Monetary Compensation NON-MONETARY COMPENSATION

9. Non-Monetary Compensation Compensation from a Provider to a physician in the form of items or services that does not exceed the annual cap amount, does not constitute a prohibited financial relationship when the following conditions are met: • The compensation is not determined in any manner that takes into account the volume or value of referrals or other business generated by the referring physician; • The compensation may not be solicited by the physician or the physician’s practice; and • The compensation arrangement does not violate the anti-kickback statute or any federal or state law or regulation governing billing or claims submissions.

10. Definition – Non-Monetary Compensation Annual Cap Amount The annual aggregate Non-Monetary Compensation to a Recipient may not exceed the calendar year amount listed below for an individual Provider 2004 - $300.00 2005 - $308.00 2006 - $322.00 2007 - $329.00 2008 - $338.00 • Annual Non-Monetary Compensation will be tracked by individual Provider (Hospital)

11. Definition – Non-Monetary Compensation Examples: • All staff events such as picnics or golf tournaments • Meals • Welcome Gift Baskets • Birthday movie tickets • “Doctor Day” pies • Food items such as holiday turkeys • Tickets to sporting events, Hospital or Hospital Foundation or Auxiliary functions, concerts, performances, etc. • Coffee certificates • Service Awards • Thank you gifts

12. Non-monetary compensation given to physicians or immediate family members by Provider’s Foundation or Auxiliary must be reported and tracked as a physician’s non-monetary compensation.

13. Definition – Non-Monetary Compensation • Please note that gift certificates generally are considered cash equivalents, and therefore, will not fall within the non-monetary compensation exception. Gift certificates that are redeemable for a significant variety of items are considered cash equivalent, i.e., a $10 Wal-Mart gift card may be used to purchase a variety of items, and therefore, it is cash equivalent and does not fall within the non-monetary compensation exception. A punch card worth ten free coffees only redeemable for those ten coffees is not considered cash equivalent, and therefore, may be considered non-monetary compensation.

14. Definition – Non-Monetary Compensation • Stark III Exception - Medical Staff Appreciation Event: A hospital may host one annual local social event for the entire medical staff without including the cost of the social event in the Non-Monetary Compensation annual cap limit for those physicians attending the social event. However, the gifts or giveaways at the social event still count towards the annual cap limit. The Provider will determine the Medical Staff social event that will not be included in the Non-Monetary Compensation annual cap limit for those physicians attending the social event.

15. Definition – Non-Monetary Compensation Non-monetary compensation where no direct relationship to a Provider exists must also be approved and reported Provider education and training programs, while likely not a Non-Monetary benefit, are to be reported • Documentation should include benefits to Provider and an estimate of what physician is foregoing to attend this program

16. Definition – Non-Monetary Compensation If Non-Monetary Compensation is provided as part of a contractual relationship, the compensation does not have to be reported • If there is a contract in place to compensate physician for speaking at a local training program or to participate in Decision Accelerator the compensation does not have to be reported as non-monetary compensation

17. Definition - Incidental Medical Staff Benefits INCIDENTAL MEDICAL STAFF BENEFITS

18. Definition - Incidental Medical Staff Benefits Compensation in the form of items or services (not including cash or cash equivalents) from a Provider to a member of its medical staff when the item or service is used on the hospital’s campus does not constitute a prohibited financial relationship under Stark if all of the following conditions are met:

19. Definition - Incidental Medical Staff Benefits 1. The compensation is provided to all members of the medical staff in the same specialty without regard to the volume or value of referrals or other business generated between the parties; • Compensation does not have to be accepted by every member to whom it is offered. 2. Except with respect to identification of medical staff on a hospital Web site or in hospital advertising, the compensation is provided only during a period when the medical staff members are making rounds or are engaged in other services or activities that benefit the hospital or its patients;

20. Definition - Incidental Medical Staff Benefits 3. The compensation is provided by the hospital and used by the medical staff members only on the hospital’s campus. • Compensation, including, but not limited to, the identification of the medical staff on a hospital Web site or in hospital advertising, food and beverages provided in the Medical Staff lounge and meals provided during a Medical Staff meeting will meet the “on campus” requirement.

21. Definition - Incidental Medical Staff Benefits 4. The compensation is reasonably related to the provision, or designed to facilitate directly or indirectly the delivery of, medical services at the hospital; 5. The compensation is of low value (Per Incident Cap Amount) with respect to each occurrence of the benefit; • Example: each meal given to a physician while he or she is serving patients who are hospitalized must be of low value.

22. Definition - Incidental Medical Staff Benefits 6. The compensation is not determined in any manner that takes into account the volume or value of referrals or other business generated between the parties; and 7. The compensation arrangement does not violate the anti-kickback statute or any Federal or State law or regulation governing billing or claims submission

23. Definition - Incidental Medical Staff Benefits Per Incident Cap Amount The Per Incident Cap Amount of Incidental Medical Staff Benefits a Provider may provide a Recipient is adjusted annually: • Less than $25.00 in 2004 • Less than $26.00 in 2005 • Less than $27.00 in 2006 • Less than $28.00 in 2007 • Less than $29.00 in 2008

24. Definition - Meeting, Service & Activity Compensation PHYSICIAN COMPENSATION FOR MEETINGS, SERVICES AND ACTIVITIES

25. Definition - Meeting, Service & Activity Compensation • Physicians may be compensated for participating in a meeting, service or activity in which Alegent Health or Provider will realize a benefit from the physician’s participation. • Participation in Decision Accelerator Meeting • Medical Staff leadership education

26. Definition - Meeting, Service & Activity Compensation • Benefit to Alegent Health or Provider must be documented. • Letter Agreement or Contract may be in place outlining the terms and conditions of the compensation.

27. Tracking Process & Procedure Physician Non-Monetary Compensation and Incidental Medical Staff Benefits in excess of the Per Incident Cap Amount, will be aggregated by individual Provider as the physician has unique and independent responsibilities to each individual Provider where the physician holds medical staff benefits.

28. Tracking Process & Procedure Alegent and Provider will keep a log of Non-Monetary Compensation and Excess Incidental Benefits for purposes of external review and Alegent’s internal accounting. • Physician Non-Monetary Compensation and Excess Incidental Benefit Documentation Form will be used. Alegent and Provider will keep a log of Compensation to Physicians for Meetings, Services and Activities for purposes of external review and Alegent’s internal accounting. Physician Meeting, Service or Activity Compensation Documentation Form will be used.

29. Tracking Process & Procedure When Non-Monetary Compensation exceeds the annual cap amount, Provider shall seek reimbursement from the Recipient for the amount above the annual cap amount. • Provider will bill Recipient for the amount(s) in excess of the annual aggregate cap. • Appropriate billing and collection activities will be undertaken by Provider.

30. Tracking Process & Procedure Provider will also provide a clear communication to the Recipient as to whether the Non-Monetary Compensation constitutes reportable income to avoid penalties and sanctions. A Provider may not give the Non-Monetary Compensation for no purpose other than to ensure that the physician receives the entire annual amount.

31. Tracking Process & Procedure All persons (“Submitter”) providing Non-Monetary Compensation Benefits and/or Excess Incidental Benefits to Recipients or compensation for meetings, services and activities must provide detailed information about the benefit and Recipient to Provider (COO or designee) or System Compliance Officer

32. Tracking Process & Procedure • A Physician Non-Monetary Compensation and Excess Incidental Benefit Documentation Form must be completed for ALL Non-Monetary Compensation and Excess Incidental Benefits. • A Physician Meeting, Service or Activity Compensation Documentation Form must be completed for ALL physician meetings, services or activities where Alegent is assuming the cost for the physician.

33. Tracking Process and Procedure • Completed forms are given to the Provider’s COO (or designee) or System Compliance Officer prior to the provisions of the Non-Monetary Compensation or Excess Incidental Benefit • Non-Monetary Compensation or Excess Incidental Benefit will be entered into the System tracking system • COO or designee or System Compliance Officer will determine if the amount will exceed either cap amount and notify Submitter.

34. References • Policy 600.036 Physician Compensation for Services, Meetings and Activities that Provide Benefit to Alegent Health • Attachment A – Physician Meeting, Service or Activity Compensation Documentation Form • Policy 600.037 Non-Monetary Compensation and Incidental Medical Staff Benefit • Attachment A – Physician Non-Monetary Compensation and Excess Incidental Benefit Documentation Form • 42 CFR 411.357 (k) and (m) Exceptions to the Referral Prohibition Related to Compensation Arrangements • Information located under Non-Monetary Compensation in Legal/Compliance Department on MyAlegent07

35. Questions If you have questions, please contact Charles Sederstrom at 402-343-4425 or csederst@alegent.org or Maureen Cavanaugh at 402-343-4328 or mcavanau@alegent.org