With the ever-increasing emphasis on compliance and new understanding of CMS’ interpretation of the Stark Law coming out of the self-disclosure protocol, health lawyers should reconsider the wisdom of direct contractual obligations, penalty clauses, cost of living adjustments, evergreen provisions and complex compensation or expense formulae when creating contractual relationships -- what used to be a “best practice” may now be a trap for the unwary.
Questions addressed included:
- What are the pros and cons of direct versus indirect financial relationships?
- How to balance complexity versus practicality?
- When should you sacrifice precision for ease of implementation?
- Are evergreen clauses a good or bad idea?
- Are the six-month holdover provision and temporary noncompliance exception enough to save an arrangement?
- Late fees and other penalties – are they worth it?