ARSENAL DISPUTE RESOLUTION

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In addition to the Stark Law, the. AKS also deals with remuneration related to improper referrals. Although these two laws are similar, there are several important distinctions. The most obvious distinction is that the AKS includes a civil (monetary) as well as a criminal penalty, where the Stark Law only imposes civil penalties. Unlike the Stark Law’s strict-liability standard, in order to prove a criminal violation of the AKS, the federal government must prove intent. Further, the AKS is broader – whereas Stark Law only applies to physicians and DHS, the AKS applies to any services reimbursed by federal funds, and AKS involves any person or entity that makes a referral, not just physicians.

The Arsenal Companies Mediation Service provides neutrality, confidentiality, time and financial savings in comparison to the judicial litigation process. All sessions are conducted by an attorney with an extensive background in/knowledge of the law who specializes in negotiations and alternative dispute resolution.

Areas of Dispute Resolution:

• Contractual disputes

• Commercial disputes

• Consumer complaints

• Employment disputes

• Administrative Law

• Professional negligence or malpractice all

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The AKS creates liability for anyone who consciously and deliberately accepts or offers any consideration with the intention of manipulating a referral. Punishment may include up to ten years in federal prison and fines as little as $25,000 up to $100,000 per violation. However, federal law provides for various safeharbors to both the Stark Law and AKS, including bona-fide employment arrangements, personal services contracts, space and equipment rentals. In order to satisfy a safe-harbor requirement, these arrangements must be in writing and must be no more or no less than the fair-market value. Note that any fair-marketvalue analysis pursuant to Stark Law or AKS should be performed by an independent, qualified third party – the “back-of-the-napkin” analysis performed by the landlord’s property manager will not suffice. In most conventional landlord-tenant relationships, Stark Law and AKS will not apply. However, in a medical-office or similar lease, these laws can come into play if the property were owned by multiple doctors or family members with certain interests in tenant medical businesses, or a tenant hospital at which the doctors have admitting privileges and provides services to the doctors’ patients. Another instance is if the tenants are those doctors who are owners and cross-refer to each other. The federal government has kindly issued warning signs for when AKS or Stark Law may be implicated: (1) excessively high or low rent, (2) rental amounts conditioned or linked patient referrals; (3) companion payments that are not based on expenses for valuable services; (4) rent for space greater than the tenant’s business needs, (5) rent that is not fixed in advance, or are reset more than once per year, (6) rent based on hourly use without fixing the number of hours to be used, (7) rent based on Federal health-care program beneficiaries referred, or (8) rent based on Federal health care program payments. These warning signs are not exclusive – they are just free, friendly advice from the federal government.

In a garden-variety retail or office lease, these warning signs would be irrelevant, but if you are involved in a health-care-facility lease, then these factors could be problematic and give rise to civil and criminal liability. So how are real-estate professionals supposed to navigate through this maze of federal regulations? Thankfully, the law provides safe harbor exceptions, which, if followed, will help you comply with the law. Although the safe harbors in the Stark Law and the AKS are not identical, both rules have the following general requirements for heal-care-facility leases:

1. All leases must be in writing and signed by both parties.

2. The lease must specify the premises being leased.

3. The lease term must be for at least one year.

4. The size of the premises must not be too large for the medical business.

5. The rent must be fair market.

6. The lease cannot have any charges or payments for the number or value of referrals.

7. The terms of the lease must generally be commercially reasonable.

Note that each law has some additional requirements that must be followed.

In conclusion, it is highly recommended that you perform a check-up on all of your health-care-facility leases to determine whether or not they are in compliance with all applicable health-care laws. Further, since business relationships morph over time, and laws are constantly changing, you should conduct an annual examination of your medical leases to make sure they are all in good health. If you find any facts or circumstances that could be suspect, take immediate action to cure the violation – especially since some laws have self-reporting requirements (yes, you must rat yourself out!). Lastly, don’t try and navigate these laws by yourself – you should engage trusted professionals that are qualified and experienced to spot and correct issues and help you plan for the future.

• Landlord-tenant disputes

• Real estate disputes of all types

The goal of resolving conflict in a personal or business relationship should not be victory or defeat. It should be reaching a sustainable and durable understanding and letting go of our need to be right.

Justice Fairness Law

682.224.5855 www.thearsenalcompanies.com/ mediation-services

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