Stark Law Case Study

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Pages: 2

Strategic alliances between medical providers, in general, competitors have been a widespread approach to expand within new markets, receiving or obtaining high priced technology or services, merging capacity or buying power, and attaining economic adeptness in medical care for years. “Hospital-physician joint ventures, joint operating agreements among hospital competitors, joint ventures over hospital cost centers, group purchasing organizations and shared service organizations, joint management arrangements, and operating leases are all common forms of strategic alliances that have been utilized in health care by and among providers (Olderman, 2008).” Strategic alliances are part of a permissible understanding that may or may not consist of the growth of a separate combined venture entity whereas a continuing connection is created for the intentions of developing a connection amongst the provider and the supplier that goes beyond the usual commercial affiliations and gives one or more strategic or competitive benefits within the participants. The main reasons for a strategic alliance within the providers and …show more content…
Within the Stark law, a medical doctor could perhaps not refer their patient for specific medical services or treatments to be recompenses within the federal healthcare programs to a health care entity whereas the medical doctor has an ownership interest or some type of compensation agreement. There are certain exceptions that pertain to the Stark law such as, the Stark regulations permit nonmonetary payment (not greater than $300 every year) to medical doctors coming from a referred-to entity. The most complex and difficult character of Stark laws signifies that hospitals have to be extremely cautious about compensation plans or arrangements that are made with medical doctors (Page & Fields,