5 Ways To Avoid FCA Trouble In Hospital-Doc Lease Deals

March 27, 2014 – In The News

Victoria Heller Johnson was quoted in the Law360 article, "5 Ways To Avoid FCA Trouble In Hospital-Doc Lease Deals." Full text can be found in the March 27, 2014, issue, but a synopsis is noted below.

A steady stream of multimillion-dollar penalties imposed by federal authorities against hospitals and doctors over improper rental contracts indicates that providers still get tripped up by the interplay of the Anti-Kickback Statute, Stark Law and False Claims Act in real estate contracts.

To help avoid legal trouble in medical office space deals, attorneys say providers should be sure to charge fair market value and get professional appraisals.

“I don’t think it is that hard. Frankly, I think a lot of it has to do with folks not doing proper due diligence in coordination with their leasing transactions,” Victoria H. Johnson said. “We always recommend that you get a third-party evaluation - a lot of times, parties don’t follow through with that.”

Arrangements should also be spelled out in writing, and while that may sound simple, Johnson noted there are several downfalls, including letting doctors move in while contracts are still being negotiated and allowing offices to remain occupied after a lease has expired.

Johnson says providers should “work out these arrangements in advance, get them reduced to writing in a timely manner and make sure you include the proper adviser.”

Attorneys also suggest maintaining oversight with arrangements and considering selling off the office space they may have developed or purchased previously.