Medical Spas and US Federal Laws

healthinsurance1Stark Law: The Stark Law prohibits physicians from making referrals for a “designated health service,” to any entity with which the physicians have a financial relationship. A financial relationship means either an ownership interest or a compensation arrangement.

Fee Splitting: In the United States federal laws prohibit kickbacks or commissions given to entities referring physicians. This law includes the enticing of clients by physicians and can be a felony with fines starting at $25,000.  This law is eased for emergency doctors who are typically paid a fee for their services.

Net Profit Agreements: Typically found to be illegal, net profit agreements allow a management fee paid out of the net gathered for each service. This type of payment is typically seen as sharing profits or fee splitting.

MSO (Managed Service Organization) Agreements: An MSO agreement allows the physicians to practice according to their training and range of experience. The management arm facilitates general business practice and allows the medical arm to practice medicine. Depending on how strictly this rule is followed, MSO agreements are typically allowed. Exculpatory clauses stating the good intentions of the agreement will not help in a judgment and details like selection of equipment, pricing, and scheduling being made exclusively by the physicians are key components in judgments.

 

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