All leases carry some level of risk and responsibility on the part of the lessor. For example, the lessor must ensure the lessee has liability insurance that will cover the lessor in the event of a lawsuit. Another example: The lease needs to be clear on who will be responsible for maintaining certain areas of the space. Generally, when one health care provider who bills to Medicare, among other Federal plans, leases space and/or equipment to a fellow health care provider who does the same billing, there are additional matters to consider, namely the Anti-Kickback Statute (AKS) and the Stark Law (Stark) (See (https://oig.hhs.gov/compliance/physician-education/fraud-abuse-laws/ .)

Here, I define the AKS and Stark laws, how they apply to the lessor and lessee, how to comply with said laws, and I provide a caveat for those who may believe these laws don’t pertain to them.

Defining AKS and Stark

AKS and Stark prohibit referrals by one health care provider to another health care provider if there is a financial relationship between the two providers. Leases are considered a financial relationship. For this reason, it is imperative that, prior to entering into these arrangements, the health care lessor and lessee understand how to comply with these laws. After all, violation of AKS and Stark can subject the health care providers to civil and criminal penalties, as well as possible exclusion from participation in the Medicare program.

Complying with said laws

A leasing arrangement between two health care providers can be compliant to the said laws if it falls under a safe harbor provision of AKS or an exception under Stark. To accomplish this, the lease must meet the following requirements:

1. Be in writing and signed by both parties.
2. Specifically detail the space and/or equipment that will be used by the lessee.
3. Have an amount at fair market value and not take into account the volume of referrals between the lessor and lessee.

A caveat

If you are not a Medicare provider, you may believe this does not apply to you. However, in recent years the federal government has used the Travel Act and state bribery laws to expand this anti-kickback regulation to include private insurers as well. (See www.justice.gov/usao-ndtx/pr/14-defendants-sentenced-74-years-forest-park-healthcare-fraud .) The Travel Act “prohibits travel or the use of facilities of interstate or foreign commerce for the purpose of furthering an ‘unlawful activity,’” according to the U.S. Department of Justice. These items, in combination with the frequent changes in health care regulations, make it difficult for health care providers to ensure their leases are compliant. Therefore, before entering into any lease, I highly recommend you seek the advice of a health care attorney who can ensure your compliance with federal, state, and local laws. OM

Disclaimer: The information in this article is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. The information contained in this article is not legal advice, and it is not intended to be a substitute for legal counsel on any subject matter. No reader of this article should act or refrain from acting on the basis of any information included in, or accessible through, this article without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.

DR. GILBERT-SPEAR owns a multi-location optometry practice in the panhandle of Florida. It is called The Vision Hub, LLC. Additionally, Dr. Spear is an attorney at Dr. Katie Gilbert Spear, PLLC, in Pensacoloa, Fla., focusing her practice on health care and compliance.