John W. McDaniel, MHA

John W. McDaniel, MHA

Founder & Chairman




During this time of year, hospitals are busy planning and developing initiatives for the coming year. This includes the assessment and renewal of various physician arrangements as well as finalizing both physician employment and recruitment agreements. In addition to these traditional types of agreements, it is not uncommon for hospitals to have contractual agreements with independent physicians for services such as medical directorships, office space leases, on-call arrangements, recruitment agreements and professional services agreements. Many hospitals focus on the initial physician contract development itself, taking steps so that appropriate provisions are included and that the contract is fully analyzed by the legal department of the hospital or by outside counsel. But some hospitals may lack appropriate monitoring procedures that can assist with continued contract compliance.

If such systems are not already in place, hospitals should consider creating and maintaining a database of existing, new or renewed physician contractual arrangements potentially including the identity of the parties, a description of goods and services provided under the arrangement, compensation methodology and amount and documented fair market value for each transaction, preferably by an independent third party.

Given various government enforcement initiatives, hospitals may consider analyzing the documentation available for their physicians’ contractual arrangements. This analysis can assist in identifying potential areas at risk for violations of the Anti-Kickback Statutes or Stark Law.

Based on issues that an internal assessment may trigger, hospitals can work with their legal counsel to determine the appropriate scope for an internal assessment of existing physician contractual arrangements.

The attached checklist should assist in identifying areas needing further review.

For further information regarding the Development of your Physician Contract Compliance

    John W. McDaniel, MHA

    Founder and Chairman

    Peak Performance Physicians, LLC

    909 Poydras Street – Suite 2600

    New Orleans, LA 70112

    800-764-2633 (office) 504-453-8108 (cell)


    1. Have any current contracts expired?  Yes  No
    2. Are there any financial relationships where no written contracts exist?  Yes  No
    3. Are there any undocumented Modifications of financial terms?  Yes  No
    4. Have any terms been modified during the first contract year?  Yes  No
    5. Do all agreements correctly describe the services being provided?  Yes  No
    6. Do any hospital benefits to a doctor exceed Stark’s minimum exception?  Yes  No
    7. Has there been non‐enforcement of late payments or non‐payment for certain months or a lengthy period of time?  Yes  No
    8. Are there any increased space usage by physician tenants without amendments to the applicable lease agreements?  Yes  No
    9. Do all payments match the terms of each agreement?  Yes  No
    10. Has there been any failure to comply with other terms and conditions set forth in safe harbors or exceptions for lease arrangements under the Anti‐Kickback Statutes and Stark Law?   Yes  No
    11. Is there any lack of current, appropriate fair market value documentation for rates of payment?  Yes  No
    12. Are there any missing or inadequate time sheets or other documentation to support past payments?  Yes  No
    13. Are there any payments for services reflecting renegotiated rates without timely amendments to the effective contract?  Yes  No
    14. Have any payments been made without a current active contract?  Yes  No
    15. Have there been any changed or reduced responsibilities for medical directorships without applicable amendments to the effective contract?  Yes  No
    16. Are there any payments that do not match the terms of the written agreement?
     Yes  No
    17. Has there been any failure to comply with other terms and conditions set forth in safe harbors or exceptions for personal service arrangements under the Anti‐Kickback Statutes and Stark Law?  Yes  No
    18. Do payments to recruited physicians match contract terms?  Yes  No
    19. Is all appropriate financial information provided by recruited physician available to support income guarantee payment?  Yes  No
    20. Has there been any failure to comply with other regulatory requirements imposed on recruitment arrangements under the Anti‐Kickback Statutes, Stark Law or tax‐exemption requirements?  Yes  No
    21. Has there been any failure to report forgiveness of debt?  Yes  No
    22. Are there signed, written contracts as well as applicable amendments for contractual arrangements to which payments were made or received?  Yes  No
    23. Is there appropriate documentation of fair market value (developed either internally or provided by a third party consultant) for compensation, income guarantee (e.g., reasonableness of guaranteed compensation levels), loans, and purchase or lease of items or other services (if applicable)?  Yes  No
    24. Is there documentation of physician and community need for recruited physician(s)?   Yes  No
    25. Is there documentation indicating payments made to the physician(s) match the written terms of agreement (e.g., analysis of accounts payable runs)?  Yes  No
    26. Is there documentation indicating payments received from physician(s) match written terms of agreement (e.g., analysis of accounts receivable runs for office leases)?  Yes  No
    27. Is there documentation provided by physician(s) supporting payments made to physician(s) from hospital (e.g., incurred expenses for recruitment agreements, time sheets for services agreements)?  Yes  No
    28. Has there been an assessment of the hospital’s current system for management and administration of physician contractual arrangements, including the use of a centralized data base?  Yes  No
    29. Has there been an analysis regarding the individual contracts and noting whether the responsibilities are listed and are unique in nature compared to the other contracts the physician or physician group might have with the hospital (i.e., each contract “stands on its own” from a responsibility standpoint)?  Yes  No
    30. Has there been an analysis regarding the monthly time sheets for the assessment period for each contract provided to the hospital for payment to confirm that the hours worked are within the terms of the individual agreement and that the hours submitted for payment don’t “overlap” with other time sheets submitted for a Physician’s or a group’s other contracts?
     Yes  No

    Are You Prepared For The 2019 Nursing Home Compliance Program Mandate?

    On November 28, 2019, skilled nursing facilities (SNF) and nursing homes will be required to adopt and implement a compliance program as a condition for participation in Medicare and Medicaid.  On that date, state survey agencies will begin reviewing nursing homes’ implementation of effective compliance programs.  It is expected this will be an aggressive area of enforcement, so it is important to make sure your SNF and nursing home compliance program is satisfactory.  The mandate identifies elements of an effective compliance program, including:




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