Intro/Outro (00:01):
Welcome to Health Law Talk, presented by Chehardy Sherman Williams Health Law. Broken down through expert discussion, real client issues and real life experiences, breaking barriers to understanding complex healthcare issues is our job.

Conrad Meyer (00:22):
And good morning, or good afternoon, everyone, wherever you are, whatever time you’re listening. Another episode of Health Law Talks at Chehardy Sherman William, and just as the title suggests today, we’re going to be talking about basics of a healthcare law analysis. Sort of like what happens when providers call healthcare lawyers and say, Oh, I wanna buy this, or I wanna do this deal. you know, what, what do I need to do? How do I need to structure it? And in the the suite today, or the studio today, again, our co-host, Roy Bellina,

Rory Bellina (00:54):
Good morning or Afternoon, everyone.

Conrad Meyer (00:57):
And, and Rory, and I thought today would be sort of a throwback back to basics. I know that we’ve talked before on some very advanced topics, but a lot of times we get calls from physicians just starting out in their practice, or they’re very entrepreneurial, and they wanna sort of take over the world and they say, I wanna buy this, or I wanna go into this deal. And suddenly, you know, you get the call and the, and so we wanted to talk about what goes on in our minds and how do we help clients out when they first call us on some of the basics of a structure analysis.

Rory Bellina (01:29):
Sure. So I think what we talked about, you know, and I know we’ve discussed this in a previous episode, is getting past, you know, what you wanna buy and talking about your purchase price, and are we gonna do a non-disclosure and go into that little exclusive period? And, and we’ve talked about that before and how to structure those kind of the Art of the Deal episode that we did. But moving past that, once you kind of get past that and, you know, decide that it, it’s something that you can financially do and something that you’re very interested in, we start to look at it from a healthcare site. And there’s definitely an initial analysis and then a more detailed one. And typically we get a lot of questions, or asked a lot of questions in the beginning and then kind of unpeel the onion and see where we need to go after that. And is this something that, that you can do that the client’s gonna be happy with? If we have to put parameters on it and, and what it would look like? So

Conrad Meyer (02:20):
The first, I guess, and, and when we talk about deals, I mean, and I know we did do the Art of the Deal. I mean, I remember that episode that was really good. but a deal could look like anything from a physician wanting to buy another practice, a physician wanting to buy some sort of an ancillary service like an imaging center or, you know, physical therapy speech therapy, anything that could be considered ancillary maybe even dme, right? Sure. Or or something like that. So what, when we first get the call even, even sometimes before the loi or the nda, before we even get to those things that the r d I know sometimes we, we, it’s after the question becomes is, can we do, can I do this? Sure. Right. So the first what, you know, the first thing that triggers, I think, in the healthcare lawyer’s mind is, is this a stark issue? Sure. Or, and in any kickback issue, I mean, the two basic, you know, regulatory schemes that we think of structure-wise, because those are the two things that would affect, I think, the deal the

Rory Bellina (03:23):
Most. Sure. And I, and I think a lot of times, you know, our clients, I notice this definitely true for me. You know, they get pitched before they call us. Oh, and they’re at, they’re at a dinner or they have a friend that’s doing it. The friend one is the one that always gets us not in trouble, but we sometimes have to re that in because they’ve got a friend that’s doing it or has been doing it, and now they wanna do it. They do it lucrative. It is

Conrad Meyer (03:48):
All these other people do it in this state, Right. Why, why

Rory Bellina (03:50):
Can’t we do it? And then sometimes we have to say, Well, here’s why we wouldn’t advise that, and, and let’s go into those details. But a lot of times they’ve already been pitched on it, They’re excited, they see their buddy doing it, how profitable it could be, how it’s changed their business. It’s made their life better. And, you know, they want to, they want to do this ancillary company or whatever it may be. And that’s when we have to say, Okay, well, what is this gonna look like and what all does it entail? And like you said, you know, is this a stark analysis? Is this gonna be an anti kickback analysis? And the big thing that we have to kind of, that I jump into my head is, Okay, what is it, What are we billing? Who are the patients? Who’s, who are the payers? And I think that is where you and I both typically go to first is what are we billing? You know, is this something that based on the code, is it a designated health service that is gonna put us in the stark world, or is it not? And can we just kind of push that analysis off to the side?

Conrad Meyer (04:44):
Well, let’s, let’s step back for the listeners. So for those of you who are not familiar with Stark this is a, a a, I guess what we call a mosaic fluid regulation that has evolved over decades Sure. In the healthcare world. That was initially, you know, legislated into law through Pete Stark. Sure. I mean, way back when I would say, was it the eighties,

Rory Bellina (05:07):
Seventies, seventies, seventies or eighties? I

Conrad Meyer (05:09):
Think, you know, and, and so the initial thought was that we wanted to curb physician over utilization on Medicare services through you know, some sort of a scheme to make money, you know? Mm-hmm. Yep. By, by shuffling patients to ancillaries that, that they had, you know, over utilization problems, right?

Rory Bellina (05:28):
Mm-hmm. , they, their families was, was the big concern at that time. And, and it was apparently very prevalent in California, which is where Pete Stark was out

Conrad Meyer (05:35):
Of. So basically, the Stark Law can be broken down into, they call the self-referral law. Sure. And so, a physician provider, and that’s defined a defined term, a provider is prohibited from referring patients to an entity within which they have they or an immediate family member have an ownership interest interest for designated health services, unless a specific exception applies. That is the, the, the 50,000 foot view of the,

Rory Bellina (06:04):
Of the rule. Right. And every word you just said is defined , That’s right. Is defined in the law very specifically, and there’s been revisions to it. And SARC two, you know, changes some things. And there’s been, we don’t, we’re not gonna get into that today. Be, we’ll, we’ll stick with the physician example, but I’d just like to give our listeners a little commentary or color on that. That there’s, it defines a’s true a physician is, it defines what an immediate is your cousin in immediate family Well, is your second cousin. Right. Your cousin, by adoption, I mean, it goes into all those details. We’re not

Conrad Meyer (06:33):
Gonna, what’s a referral, right?

Rory Bellina (06:34):
Sure. What’s a referral? That’s a, that’s a really good one. Designated health services is probably the cleanest thing because every year

Conrad Meyer (06:41):
Is

Rory Bellina (06:42):
A list. CMS puts out a nice spreadsheet and you can just, if the doctor tells you that CCPT code, you can just search and say, Yep, it is, or Nope, it’s not. And, and kind of move on from there.

Conrad Meyer (06:52):
So, so one of the things that, as Rory was, you know, we were discussing, you know, when we think about the call that we get and say, Okay, who is our patients? Where are they coming from? Et cetera, in our minds, we’re going through this stark analysis. You know, so in our minds, even though we’re not gonna go into the detail of the defined terms, I’m thinking, Okay, where are the referrals coming from? From what payer? Is it Medicare? Which would, you know, clearly apply with Stark if again, the other things applied. Sure. is it commercial pay? Is it anything that’s gonna affect our state law here in Louisiana? And, and, and so you’re running through those rabbit traps. So, so break down, you know from the Stark problem analysis, number one, is it a referral? Right? Number two by a position or provider to an entity. What’s an entity? Mm-hmm. within which the provider or an immediate family member, which is also defined mm-hmm. is, is has an interest mm-hmm. , Right.

Rory Bellina (07:51):
Which is defined, Which

Conrad Meyer (07:52):
Is, which is defined for dhs. Yes. Okay. And if it is, it’s prohibited. Unless, unless an exception. Correct. Now, here’s the funny thing. How many times have you seen on a piece of paper an attorney, right? Oh, this is a safe harbor. What’s the safe harbor versus exception? How many times have you seen them interchange

Rory Bellina (08:11):
That in those terms? Yeah. You get the safe harbors from AKs move over to exceptions to Stark and, and vice versa. And or they, you know, and we’ll get into that. It’s just because you think that you’re meeting a safe harbor doesn’t necessarily mean that

Conrad Meyer (08:24):
It’s, But, but then again, I have the question. I mean, does a lawyer on the other side really know what they’re doing? Make

Rory Bellina (08:30):
That right? When, when I see those terms interchange, it’s either, it’s either done in, in a commentary like this where you’re just talking really fast and you just switch the terms. But, but sometimes, like you can pick up little cues that, Okay, wherever they got this advice from, they use the wrong term. Let me take another look at

Conrad Meyer (08:45):
This. Right. So, so, so back to start. So we do our stark problem analysis and kind of say, Okay, all right. Do we, do we fill these buckets, Right? Sure. And, and that’s the first sort of, the first sort of, I guess, hurdles, right? Sure. That you swim through. Yeah. And then the lawyer, you know, the lawyer will kick in and tell the doctor, Okay, well or provider yeah. Yep. This looks okay. Mm-hmm. and we can move forward if we structure it X, Y, Z. And then, or that’s an opportunity to say, Well, no, this is not gonna work.

Rory Bellina (09:20):
Yeah. And you could stop right

Conrad Meyer (09:22):
There. What, what, what, what would go on next in your mind if from the regulatory perspective, if a deal or structure was coming after you, you’ve sort of run the rabbit traps for Stark

Rory Bellina (09:33):
Mm-hmm. . So I think the big thing with Stark is that different from AKAs, is that it’s civil and not criminal.

Conrad Meyer (09:40):
That’s true. We could talk about that. What’s the

Rory Bellina (09:42):
Difference? Right? And the, a big thing is that it’s not intent based. So a stark violation is stark violation. And it is or it isn’t. And so there’s not as much gray area with AKAs. A lot of people are much more comfortable when they get out of the stark world because they know, Okay, I don’t have to worry about that. If there’s an alleged anti kickback violation, they’ve gotta

Conrad Meyer (10:05):
What You mean intent, But what you mean by that though? You mean like, in other words, it is or it isn’t mean like you have to comply with all of the points of the correct exception, or you don’t get it

Rory Bellina (10:14):
Correct. You comply with it, or you’re in violation unless you fit in a nice little box of an exception and there’s not a whole lot of gray area with Stark. No, that’s, that’s how I like to look at it. And I think it’s, it’s guided me, well, it’s guided our clients well. there’s a lot more movement and nuance on the anti kickbacks.

Conrad Meyer (10:32):
How many times have you had to have a provider tell you on the phone? Roy, you don’t know. The stock exception is by heart. Shouldn’t you tell me the answer of the moment? I tell you my hipo

Rory Bellina (10:40):
You know that that is, that , I do get some phone calls that sometimes you get, you’re in the car and you’re, you’re driving. You get that question and you’re like, Hold on, I need to really think this through. Cause it’s a, it’s a complicated analysis and Right. And it’s, it’s a yes or a no. And so you don’t want to give that advice. There’s no gray, there’s really no gray area at Stark. And so you really wanna make sure that, that, that you’re getting it right and looking at it and, and making sure that they do fit within an exception. Cuz if they don’t, it’s strict liability. It’s, it’s a violations of violation. There’s no, I didn’t mean to do that. It, it’s there.

Conrad Meyer (11:15):
Well, one interesting thing about that, and sometimes I use this example, I say, Well, doctor, Doctor, you’re calling me on a phone call giving me your, your hypo or your structure of your deal that you want. And you’re asking me to give you an answer today. Let me ask you this, Doctor, if I came in your office and said, Doctor, I’m gonna tell you how I feel and I’m gonna tell you, I’m not too feeling too well, I’m sick. I don’t want you to do any diagnostic test on me, but I want you to tell me what’s wrong with me. What would you do? How would you

Rory Bellina (11:43):
Respond? No, X-rays, no lab,

Conrad Meyer (11:45):
X-rays, noray, no lab, no cts, no, no MRIs, no nothing. And Doctor, I want you to diagnose me right now,

Rory Bellina (11:53):
And if you don’t know what it is, I’m gonna call the next doctor.

Conrad Meyer (11:56):
The funny thing is when I say that hypo and I, I kind of shoot it back at mm-hmm. and I’m putting it in their court, they’re like, Oh, I

Rory Bellina (12:02):
Get it now. That

Conrad Meyer (12:03):
Makes sense. Right? Makes sense. That makes sense. Right. You know, and, and so that example has worked for me 100%.

Rory Bellina (12:10):
That’s a, that’s a really good one. I’m gonna start using that.

Conrad Meyer (12:12):
You should, Yeah.

Rory Bellina (12:13):
Because a lot of times I will get the call it, and you have that moment of pause and hesitancy of Okay. I, I think I know that you’re allowed in the analysis, but I just need to, I need to sit down and sketch this out. Yes. Draw out the relationship, double check everything. You’re

Conrad Meyer (12:30):
Not copyright that, but

Rory Bellina (12:31):
It’s really . That’s a really, that’s a good

Conrad Meyer (12:33):
Phrase. Yeah. But we have a, Yeah, I give you an unrestricted free use. So that kind be like,

Rory Bellina (12:36):
Thank, There you go. Everyone listening heard that . So thank you, . Thank you. But a assuming that we, and you know, an easy one that we can use as our example today is physician investment in an asc. I think that’s, Yes. I think that’s probably one of the most common things out there. You got a lot of doctors out there, you got a lot of doctors that do procedure Well,

Conrad Meyer (12:55):
Because now, now that the whole hospital exception is gone Sure. The next avenue is getting something on a facility fee. And the ASC is a, like, is the target.

Rory Bellina (13:02):
Sure. And I, and I think, and ASCs, you know, are having relatively shorter and shorter lifespans from what I see. Yes. They’re, they’re opening up, they’re lasting a while, people are making their money than their closing or being sold, and then we’re gonna open up a new one with new technology, new equipment. And so you keep seeing this cycle of physician investments. So I think that’s a good example that, you know, gets you outta stark. We don’t have to worry about that. pivot over to the AKs side.

Conrad Meyer (13:30):
Well, well, and, and, and I think when we get to AKs, it’s a lot more difficult. Sure. because now we’re looking at a criminal based intent, intent

Rory Bellina (13:40):
Based, based,

Conrad Meyer (13:41):
You know, regulation. Sure. So so now the, and, and the this, when I try to tell providers that AKs is, is more problematic, the issue with AKs is that the safe harbors are there. That, that you tr you’re, I find you’re never gonna fit one wholly. A hundred percent

Rory Bellina (13:58):
Correct. And, and another thing that’s very nuanced with anti kickback statue, which you have a really good definition for Stark, so I’d love for you to give one for AKs. Okay. Is that just because you don’t meet a safe harbor right? Doesn’t mean that you’re violating AKs, Right? I mean, every, you wanna find one for your, your client to be in, but just because it’s not there doesn’t mean that you’re violating it. So don’t, But before we go there, a KS differentiate that or tell everybody what that is compared to

Conrad Meyer (14:27):
Stark. So AKs is just for any kickback statute and, and basically it, it was a regulation that, that was put into the place by the government, not necessarily for just healthcare, but really for anything. Sure. So basically it prohibits it, it, it prohibits any remuneration. And that could

Rory Bellina (14:43):
Be, which is defined

Conrad Meyer (14:44):
Again, Defined term, and that could be in cash or in kind mm-hmm. , and that could be in anything Yep. to basically elicit over utilization of, of governmental services, if you will. And, and that’s, I mean, that’s the, the broadest ba mm-hmm. The broadest definition mm-hmm. , I mean, I’m, I’m, there’s, there’s a lot more defined definition in the statute. Right. But that’s, that’s, that’s how I see it. and, and maybe did I, did I hit all the points? I don’t know if I hear. No,

Rory Bellina (15:08):
Those are the big points. You know, where my analysis almost instantly goes, or really, when I say, when people call me and ask me for, you know, is this a violation of a K s? They’ll say, But we’re gonna carve out Medicare patients. We’re not gonna do, we’re not gonna do Medicare patients. We’re not gonna take tricare, we’re not gonna do Medicare patients. Does that change your analysis or, or what about in Louisiana? Does Louisiana have a mini AKs? Or They do, or state, And we do and and uniquely in Louisiana is that it’s payer neutral.

Conrad Meyer (15:40):
There’s payer neutral. And in the state law we do. So you could cut out Medicare and you could cut out, you know, Medicaid, you could cut out tricare, you could cut out feba, everything out for the Feds. Right. But, but in Louisiana, our state, we, we, we have the, the mirror I call mirror AKs. Sure. So, you know, if you, if you want our state attorney general looking at you Right. You know, you could continue that route,

Rory Bellina (16:01):
Which to my knowledge, I don’t think, think has ever been prosecuted.

Conrad Meyer (16:04):
I don’t think so either.

Rory Bellina (16:05):
But you don’t wanna be the first one either.

Conrad Meyer (16:07):
Right. The test

Rory Bellina (16:07):
Case, especially when you have an aggressive attorney general. So I don’t think anyone wants to get on.

Conrad Meyer (16:12):
I think we could say Jeff Landry is very aggressive.

Rory Bellina (16:14):
Yes. I don’t think anyone wants to get on his radar, especially for a healthcare thing in this political climate.

Conrad Meyer (16:20):
So, No, I agree. I totally agree. You know,

Rory Bellina (16:22):
But getting into it, get, So we, we move past that in our comments with the client and talking about, Okay, go back to my doctor that wants to invest in asc. Okay. What are the, We’re not in Stark because it doesn’t meet a code that’s designated health services

Conrad Meyer (16:39):
So stark. So when, when you, when you, when you not, when it’s not, it’s not about the easiest, the easiest time, say it’s not stark. If it’s not on the enumerated list of dhs, it’s out. It’s

Rory Bellina (16:49):
Outta my head. I’m not,

Conrad Meyer (16:50):
We’re done or out, totally

Rory Bellina (16:51):
Done. But now I’m thinking of anti cake back. Right. And I’m thinking, Okay, is there a safe harbor for this? How do we structure this? And luckily there’s safe harbors out there for a majority of things. I would say there’s not a whole lot out there. That’s just a, a hard No. What are some things that you’ve run into that you think are, are I guess, a hard no on something?

Conrad Meyer (17:13):
Oh recently, Okay. I, that’s a good question. Recently I’ve had a question about physician owned distributorships.

Rory Bellina (17:22):
Okay. Pods.

Conrad Meyer (17:24):
Pods. Okay. And, and the question was by a neurosurgeon if I develop XD device Sure. With X company, and I own a portion of that company, Right? Okay. Can I then have my hospital who I, which in this particular case, it’s a one of the few private hospitals left. Okay, can I require my hospital to buy from this,

Rory Bellina (17:56):
My

Conrad Meyer (17:56):
Pod, right? Mm-hmm. , so in this hospital is Medicare. Okay. So in other words, it’s, you know, they, they got in right under the gun before aca, it’s Medicare approved and, and, and says, Well, can I, can I require the hospital to buy from the pod my device to use in my patients? And the answer to me, I mean, is pretty clearly No. I mean, that’s a direct line you’re benefiting from. Yep. The purchase directly and you’re in the position to refer. That’s a prohibited remuneration. Unless we can find a safe harbor that would apply. Right. And I don’t think there is something that with that direct mm-hmm. straight line like that, something that would apply. Yep. so that would be the hard No.

Rory Bellina (18:35):
What are your thoughts? I know that another popular one that I’ll always get is when you’ve got someone who wants to bring in a rep, and they use that word very loosely, but a rep,

Conrad Meyer (18:45):
Like a sales rep,

Rory Bellina (18:46):
Sales rep to market. Another word that I use very loosely, a sales rep to market something. How are you gonna structure that and what are the pitfalls that they’re gonna face? Are you gonna, because 99% of the phone calls that I get, when someone wants to bring on a sales rep to market a medical device, they want to pay them on commissions. Right? They wanna pay them on doctors that get signed

Conrad Meyer (19:10):
Up. That’s the first thing I ask is how are you paying the sales commission?

Rory Bellina (19:15):
And tell me the

Conrad Meyer (19:15):
Truth. Right. Because I can’t, I can’t give you advice if you tell me one thing and then do another, because it’s, it would just, it would just, it’s not gonna work. Right. You know, So if you’re paying the sales rep based on volume or the value of the sale, we have a problem.

Rory Bellina (19:35):
Absolutely.

Conrad Meyer (19:36):
I mean, I, that’s just, that’s it. If you’re paying the salesman a set fee, Right. In other words, your annual salary is X regardless of the value or the value of the

Rory Bellina (19:50):
Sales. And we said it for a year,

Conrad Meyer (19:52):
Which follows under the bonafide mm-hmm. employment Safe Harbor. I’m okay. Yep. Yep. So here’s the, Okay, I’m gonna lobb it back in your court, Mr. Bellina. So what happens if the response to the question is, okay, in this particular case, a sales rep mm-hmm. , what happens when we set out a bonafide safe harbor through exactly what we talked about mm-hmm. one year set in advance. But I’ve got a bonus structure, I have a bonus structure. Cause I wanna make sure to bonus all my sales people. Right. Gotta bonus ’em. Right. That basically pays on a not per sale mm-hmm. , but a bracket. A bracket. In other words, if you’ve got 150 sales, it’s 5,000. If you’ve got whatever the number is, it’s 10,000. It’s a lock step.

Rory Bellina (20:39):
Because now you’re, you’re pay you, he’s, you’re bo I mean you’re paying him, you’re bonusing him based on your, based on the volume essentially, or the value that,

Conrad Meyer (20:49):
But I’m, but I’m arguing that No, no, it’s, it’s not really volume because it is a block mm-hmm. , and then the block is set in advance. So Emma, see, this is where the fund began. This is the gray area. Right? Sure. So, and

Rory Bellina (21:05):
This is where intent comes in

Conrad Meyer (21:07):
Too. Correct. So if the intent was to reimburse the salesman, or sorry, compensate the salesman based on the volume, which I would argue it is, you know, I mean, I would say anytime you’re giving a bonus based on the number of sales, even if it’s in a block Sure. Even if it’s set in advance mm-hmm. , even if the amounts are set in advance, you’re still reimbursing, I’m sorry, compensating. Mm-hmm. The sales rep on a volume of sales. though I see the ar the counter-argument to that. So

Rory Bellina (21:36):
The counter-argument is that they might not sell anything and they’re still gonna get that base. You’ve set it in advance. Yes. It’s been set for a year.

Conrad Meyer (21:47):
What about sitting the block in advance? So in other words, the block mm-hmm. bonus of like 5,000 is set a year. You know, it wasn’t saying, Oh, you did the a hundred sales. Mm, I’m gonna give you 50 grand, whatever, you know, whatever it is, it’s set, it’s already set, but it’s set based on volume

Rory Bellina (22:06):
From what I’ve seen. Again, like you said, that’s a very gray area.

Conrad Meyer (22:11):
How often do we get gray area calls?

Rory Bellina (22:12):
It’s, it’s a, it’s very common. And it’s, is is the government, is the OIG looking at that?

Conrad Meyer (22:19):
Right.

Rory Bellina (22:19):
And what’s been their advisory opinions on those type of really

Conrad Meyer (22:22):
Relationships. That’s another good thing to talk about too, because just as we both know, oig, post advisory opinions on their website mm-hmm. , which also provides good guidance on how the government views certain structured arrangements.

Rory Bellina (22:34):
Sure. And I think it’s important to, to always look at those, It’s important to know that the advisory opinions are just that their advisory, they redact 50% of the information out of it. And they always say that it’s fact specific, situation specific, but it gives us a little bit of a look inside the glass of how the UIG is looking at these things. Right. Are they doing, I think the big thing from what I can tell is what they’re looking at are, are really like the sham employment agreements. And I think you get into trouble where your base salary is so low and the bonus is so high that it really is a sham pay for pay for, you know,

Conrad Meyer (23:15):
Business. But an example like that, I mean, when you talk to clients and you talk to, to, and they want answers. Right? Right. how many times have you told a, a provider or client that, look, I see your, your compensation model. I can’t guarantee you nothing’s gonna happen.

Rory Bellina (23:32):
Right. It it, it’s common. I can’t, You can’t, because again, it’s, it’s intent based. It’s is if the government were to come in and say you were intending to defraud and intending to induce compensation or remuneration. So

Conrad Meyer (23:45):
What, let me ask you this. So what advice would you give not only healthcare lawyers or lawyers, but providers who are seeking to do, in this particular case, this model case, right? I mean, how would you advise them? what recommendations would

Rory Bellina (23:58):
You give? I think in, in the model that we’re talking about where there’s a set base and then it’s compensation is that it, it needs to really look and smell and feel like a true employment agreement. And, and look, a lot of people do bonuses and, you know, different types of programs for selling more, but it, it needs to have some structures of a true employment agreement. There needs to be, and, and, and you know, it goes back to kind of the, the argument of are you really an employee? So, or is this a sham employment agreement? Right. You’re really an independent contractor. Right. And you never go into the office, you never get any training, you never even talk to anyone. You just go out and sell. They’re giving you this little, you know, $10,000 base salary and then they’re just bonusing you six figures and you’ve never been into the office, you don’t do anything.

(24:52):
You’ve got no set hours, no oversight, no nothing. I think that’s a pretty clear argument. It’s a sham employment agreement. You’re being paid based on Sure. Based on your volume and value. That’s, that’s the kind of thing I advise against. I think that you look at the factors of what is a true employment agreement? Are there parameters in place? Are you checking in with that rep? You know, are they being accountable? Are there meetings, some sort of set structure and hours and schedule where you know what they’re doing and is there compensation realistic for what they’re doing? And then they get, they really do get a bonus on top for, for going over and above. It’s hard to draw that line because the, the owner of the company wants to give him as low a base as possible. He wants it to be all production based.

(25:38):
Cuz the more money he makes, the more he obviously doesn’t care about paying out. and, and the reps are very used to that too because, just because it’s not the right way to do it for every, you know, 10 calls, I get where I give that advice. There’s another 50 people out there that are doing it the wrong way. And, and all these guys talk, all these reps talk and they hop around from one place to another. And before this was so he heavily regulated, especially in like the device world. That’s how all these guys get paid.

Conrad Meyer (26:09):
No, and true. I mean, and we’re talking about one single safe harbor here. The Right, the bonafide employment. So, I mean there are many more safe harbors that we, that we could discuss. Sure. But, but, and just like, like Stark law exceptions there, there are tons of Stark Law exceptions we’d only touched on on Sure. On. I think one, and we can be, you know, so, so when we are looking at this, you’re looking at as many safe harbors or exceptions as you can. And, and, and in this particular case, I mean clearly especially when you come to AKs Sure. That there isn’t a 100% guarantee like we’re a stark. If you don’t meet everything, you don’t get it. You

Rory Bellina (26:46):
Know, And I think it’s important before we, before we wrap this up, cause I know we got specific on, on one safe harbor is is explaining to the client what it is, it’s a criminal statute and it’s intent based. It is. Yes. Yes. So really explaining to them that, look, if there were to be an allegation, the government would have to allege that you intended to defraud and prove it. Mm-hmm. . And they have to meet that burden. Now, it doesn’t make clients feel very comfortable cuz they, you want to get ’em in a safe harbor, but it’s a lot higher of a burden. And so can they meet It has the government medi Yeah. They do it all the time. they’ll get you under a grand jury indictment and they’ve got all this evidence. They go through your billing records. They are, they, you know, they dive in your trash can or there’s a whistleblower Yeah.

(27:32):
That’s telling you, Oh, this is, they’re not, these reps never come in and they get this little check in the mail and they get their huge bonus at the end of the month. Then that happens all the time. And has the government proven it? Yes, absolutely. Or they’ll get you to crush under pressure or get somebody to flip on you and take a deal. Yes. Because they, they want that win, they want the money back, all that. But it’s still important to advise that it’s intent based. And I think that gives clients some comfort because a lot of clients have no intent in a fraud. They just want to structure it the best way that they can.

Conrad Meyer (28:06):
and, and I want to, I know we’re wrapping it up, but I didn’t wanna say this. So when you do the a deal and like we do the audit of the deal and you’re write in there a paragraph mm-hmm. and you know, I’m going with this maybe that we have no intent Right. Of violating the AKs Sure. And you put it in writing. Yeah. So, and sometimes I have clients that, well if we just put it in writing, will that satisfy it? Right. So, so I mean, I try to tell people that just because you write it down. Well

Rory Bellina (28:29):
I, if I’m ever requested to give a written opinion on an antica about statute, I’m very cautious with what I write. And I’m very clear to say this is a criminal statute that is intent based. Cuz you really, you just don’t know. But you have to

Conrad Meyer (28:42):
Have, just because you write you’re right. A dad doesn’t mean Correct. You’re not trying to violate it. Right.

Rory Bellina (28:46):
Correct. Correct. Interesting. So those are the, the big things and like the big analysis that we have to go through to make sure that that deals are structured the right way of it. And I think, you know, our plan for future episodes is to get to talk more about Stark, how it’s started, how it’s evolved, how, how I don’t even think it, it, it’s really shifted and I think if, I believe he’s no longer alive, but I believe there’s, he’s not, he made a comment that he, if he, he didn’t like it the way it is Now, didn’t Pete Stark make some sort of comment about how he was, did not like the way it’s evolved and if he could go back in time, he would undo it? Well,

Conrad Meyer (29:26):
Interestingly, I think there was some comments to that effect. My question is, and we could talk about this in another episode. Sure. Cause this, this

Rory Bellina (29:33):
Could hold a policy topic,

Conrad Meyer (29:35):
A policy topic. In other words, now that we’re moving to value-based reimbursement Sure. By Medicare. Right. Which is paid per episode of care. is is that the death of Stark? I mean Stark, Stark was meant to prevent over utilization. So if you’re paying on an episode of care, no longer fee for service. Right. Do we really need Stark?

Rory Bellina (29:53):
Right. And you’ve got all these quality metrics

Conrad Meyer (29:55):
Or any kickback for that matter. I mean, do you really need any kickback of the healthcare world? Right. If it’s a pay per episode of care.

Rory Bellina (30:01):
Yeah, that’s true.

Conrad Meyer (30:02):
Just to curious, you know, so I, but I agree with you. I think, I think in future episode, these, these sort of back to the basics mm-hmm. analyzing. I mean, I thought one good idea would be analyzing like the group practice. Yeah. You know, what’s the group practice exception and how does what, what is a group practice?

Rory Bellina (30:17):
Yeah. So please comment if there’s, if there’s something specific that you want us to talk about Yes. In the stock or anti kickback world. You know, today we got a little bit deep on the employment exception or safe harbor. See I used the wrong phrase too. You just did it. I did it too. if there’s a specific one that you want us to talk about or, or if you’ve got a deal in mind, I mean, you can obviously comment and say don’t give us all the information and we could do a little analysis on the show on, on how we would advise on

Conrad Meyer (30:46):
It. Yeah. I think when we say comment, if you wanna send us an email at, on our podcast email, I think we have a, what’s it podcast@shai.com? Yes.

Rory Bellina (30:53):
It’s on the link. It should be in the link below on the

Conrad Meyer (30:55):
Episode. Yes. So you’ll see it podcasts@chehardy.com. Send us an email and and tell us what you want to hear. Mm-hmm. and we can go ahead and try to make that happen.

Rory Bellina (31:03):
But we’re gonna keep diving into AKs and Stark a little bit more and go from there.

Conrad Meyer (31:08):
Fantastic. Well, let’s wrap it up here. I thank Rory. Good job on that. Excellent job my friend. Thank you. And I want to thank thank you the audience again for listening to to Chehardy Sherman Williams in our health law podcast. We are gonna wrap this up. Hope you have a great weekend and enjoy everything that you do in life. we’ll see you next time for another episode of Health Law Talk with Chehardy Sherman Williams.

Outro (31:34):
Thanks for listening to this episode of Health Law Talk, presented by Chehardy Sherman Williams. Please be sure to subscribe to our channel. Make sure to give us that five star rating and share with your friends. Chehardy Sherman Williams is providing this podcast as a public service. This podcast is for educational purposes only. This podcast does not constitute legal advice, nor does this podcast establish an attorney client relationship. Reference to any specific product or entity does not count as an endorsement or recommendation by Chehardy Sherman Williams. The views expressed by guests on the show are their own, and their appearance does not imply an endorsement of them or their entity that they represent. Remember, please consult an attorney for your specific legal issues.