Rental agreements between hospitals and doctors can be a simple concept, but can quickly become more complicated due to the different nuances of each rental agreement. It is important that hospital practitioners and health care lawyers work with evaluators who understand differences in leases to ensure that leases are in compliance with the VMF, as required by the Stark exemption for hospital-physician agreements. The involvement of an experienced valuator can help organizations identify problems, manage expectations and support leasing rates when regulators call. As with normal leases between landlords and underwriters, leases with physicians should be reviewed on a regular basis to ensure that they are based on current market conditions and take into account any changes in usage. The applicant is a multi-hospital, not-for-profit system that has a non-profit psychiatric hospital (centre). Under an existing agreement, the Centre leases non-clinical employees and receives operating and system management benefits pursuant to an agreement under which the Centre pays the full capacity costs of the system (i.e. salary, benefits and overhead) plus administrative costs by two per cent. The system called on the OIG to decide whether the removal of the administrative tax would render the agreement contrary to Antikickback`s status, since the resulting fee (fully charged costs) could be less than fair value. The OIG indicated that, according to the principles of cost reporting, since the parties are related organizations, the Centre can only take into account the actual costs of the services provided by the system as “eligible costs” and not as administrative costs.
Is the lease contrary to federal law prohibiting bribery? Health assessors have spent some time understanding how employee rental agreements are concluded by different market operators, including employee leasing companies, staff rental companies and professional employer organizations. Through their research, “we have begun to formulate a way of looking at these different regulations on a coherent basis. In doing so, we have identified several factors that influence an increase in fair value related to the underlying personnel costs associated with these agreements,” said Lara. The FMV premium depends in large part on the resources and risk of the staff leasing provider, as expected by those familiar with the fundamental valuation principles.