Federal Regulations Identify and Discuss Case Study

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Feldstein from Arizona. When the hospital was purchased by another company, they canceled the contract with Feldstein claiming that the actions that were taken were illegal. In the case, the court sided with Feldstein saying that a host of hospitals will use a variety of incentives to attract doctors. Under the Stark Law (which prohibits doctors and hospitals from making self referrals) they found that the health care facility did not violate any provision. (Stark Law 2010) However, the transaction was considered to be questionable, because of the unique arrangement that Feldstein and the hospital had about the referrals of patients. As a result, the decision would outline a number of different principals including: illegal activity arguments can be made by either party, recruiting arrangements based on referrals are in violation of federal law, hospitals need to carefully scrutinize recruiting agreements and they should develop strategies to protect themselves against possible litigation (from their recruiting program). When you put these different elements together, this means that Sundown Community Hospital must take a unique approach, when entering any kind of possible physician recruiting alliances. (Recent Federal Court Ruling 1999)

Recommendations for Addressing these Issues

The current arrangement that Sundown Community Hospital has with the Central Park Medical group could be considered to be questionable. The reason why is because 60% of the patients are from Medicare and there is a push to offer additional incentives to the doctors.

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This is problematic, as regulators could claim that this is a referral induced program with kickbacks. As a result, there must be a series of checks and balances to determine the rewards that are being offered. Once way to accomplish this objective, is to create a review committee that will consist of: staff members, former regulators and individuals from the community. In this case they will examine the law and seek to find a balance in offering incentives with the different regulations. At the same time, legal council would need to review the different recruitment policies and establish mechanisms for limiting the hospital's liability. This is important, because it will ensure that Sundown Community Hospital is following the law, while protecting their interests. These two elements must be taken into account when recruiting doctors for their facility.

Clearly, Sundown Community Hospital can engage in physician referral programs that will address the challenges they are facing. However, a strategy of limiting legal liability and ensuring that all contracts are following the law are essential (in protecting the facility). If these two elements can be included in the doctor referral program, it would create the desired benefits, while limiting legal liabilities......

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