Many of our healthcare and business law firm’s clients are in the business of renting expensive medical equipment for use by medical practices. Generally, these arrangements raise compliance questions under the Physician Self-Referral Act, referred to as Stark Law, and the Anti-Kickback Statute (“AKS”). Should a regulator find an arrangement violates either law, the consequences are severe. The perhaps unfortunate truth is that rarely can a sincere and analytical attorney tell you with confidence that an arrangement does or does not violate either law. The analysis usually places an arrangement on a scale of low to high risk of noncompliance. To assist in understanding whether an arrangement complies with Stark Law and AKS, the rules provide specific exceptions and safe harbors, respectively. Both Stark Law’s exceptions AKS’s safe harbors outline ways in which an equipment rental agreement may satisfy the protections. One question that frequently arises with our clients is whether they can structure an equipment rental agreement to have a per-use (often called a “per-click”) payment term, wherein there is no set monthly amount but, rather, the lessee pays the lessor a predetermined amount for each time the equipment is used.
In this blog post, we outline the basis rules for equipment rental agreements under Stark Law and whether per-click payment terms may satisfy Stark Law’s Rental of Equipment exception. Our next post will analyze the same question under AKS. If you have questions regarding this blog post or wish to evaluate the risks in your equipment lease arrangement, you may contact us at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, firstname.lastname@example.org. You may also learn more about our law firm by visiting www.hamillittle.com.