OB Hospitalist and Call-Coverage Payment Arrangements

OB Hospitalist and Call-Coverage Payment Arrangements at a Glance

OB hospitalist and call-coverage payment arrangements involve complex legal considerations under both the Anti-Kickback Statute (AKS) and the Stark Law. These arrangements, which often involve financial compensation for physicians providing coverage during on-call periods, must be carefully structured to avoid violating federal referral and anti-kickback laws. Such arrangements are analyzed under the safe harbor for personal services and management contracts, provided they meet specific criteria outlined in the regulations.

The Legal Framework

The Anti-Kickback Statute, codified at 42 U.S.C. § 1320a-7b(b), prohibits the offer, payment, solicitation, or receipt of remuneration to induce or reward referrals of items or services payable by a federal health care program. This statute is a criminal law with severe penalties, including fines of up to $100,000 or imprisonment of up to 10 years, or both. The regulation at 42 C.F.R. § 1001.952 outlines several safe harbors that may protect certain arrangements from being deemed illegal under the AKS. Among these, safe harbor (d) covers personal services and management contracts, which includes arrangements such as hospital-paid call coverage for obstetricians.

The Stark Law, found at 42 U.S.C. § 1395nn, separately prohibits physician self-referrals for designated health services to entities with which the physician has a financial relationship, unless an exception applies. Unlike the AKS, the Stark Law is a civil statute administered by the Centers for Medicare & Medicaid Services (CMS) and does not require proof of intent or knowledge. Both the AKS and the Stark Law include exceptions and safe harbors that may apply to certain payment arrangements, including those involving hospitalists and call coverage.

The Federal Overlay

The federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), makes it a felony to knowingly and willfully offer, pay, solicit, or receive remuneration to induce or reward referrals of items or services payable by a federal health care program. The Stark Law, 42 U.S.C. § 1395nn, separately prohibits physician self-referrals for designated health services payable by Medicare or Medicaid, on strict-liability terms. Both regimes carry safe harbors and exceptions published at 42 C.F.R. § 1001.952. State referral and fee-splitting statutes operate alongside these federal prohibitions and can apply even where no federal program payment is involved.

Reading the Research Desk

For further exploration of related topics, see our research on anti-kickback and referral law at /practice-areas/, an in-depth explanation of the Anti-Kickback Statute at /the-anti-kickback-statute-explained-why-referral-payments-trigger-scrutiny/, and a detailed analysis of safe harbors at /safe-harbors-under-the-anti-kickback-statute-and-where-providers-get-tripped-up/. Additional insights on the overlap between the AKS and Stark Law can be found at /aks-and-stark-law-how-the-two-regimes-overlap-in-healthcare-investigations/, while recent developments are covered at /recent-antikickback-statute-decisions/. Frequently asked questions are available at /faq/.