Medicare Compliance & Reimbursement

You can't change the terms of relocation bonuses after the relocation has happened

Now that the Centers for Medicare & Medicaid Services (CMS) has finished laying out the sweeping changes it wants to make to the Stark self-referral law, it's ready to give some advice.

CMS issued an advisory opinion (CMS-AO-2007-01) on the Stark law in response to a question from a hospital and physician. Experts hope this may be the first of many opinions clarifying some thorny Stark issues.

The actual opinion is "pretty straightforward," says Washington, DC, attorney Kevin McAnaney, who was an official with the HHS Office of Inspector General (OIG) for many years.

The hospital in question paid the physician a forgivable $25,000 loan and some monthly expenses and income guarantees to convince him to relocate to its geographic area. Circumstances changed, and the hospital and physician wanted to be able to change their agreement to ease the physician's financial constraints.

But CMS said that now that the doctor had already moved to the hospital's area, the hospital couldn't pay him any more, either directly or indirectly. "Whatever you put on the table has to be on the table before he comes" to the area, McAnaney says. "It's got to be an inducement for him to come. Once he's there, you can't change it."

The biggest lesson from the opinion is that you should build flexibility into your relocation agreements with hospitals in advance because you can't change them later, says McAnaney.