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Reviewing and monitoring healthcare real estate arrangements with referral sources

Timothy M. Riley ( is Senior Analyst, Goran Musinovic ( is Vice President, and Gregory P. Gheen ( is President at Realty trust Group LLC in Knoxville, TN.

The Patient Protection and Affordable Care Act (Obamacare) requires all Medicare and Medicaid providers to have compliance programs.[1],[2] On May 17, 2017, the Department of Health and Human Services, Office of Inspector General (OIG) issued “Measuring Compliance Program Effectiveness – A Resource Guide” (the Compliance Guide), which serves as a guide for healthcare organizations when assessing the adequacy and effectiveness of their compliance programs.

The Compliance Guide identifies seven key areas of an effective compliance program:

  • Standards, policies, and procedures

  • Compliance program administration

  • Screening and evaluation of employees, physicians, vendors, and other agents

  • Communication, education, and training on compliance issues

  • Monitoring, auditing, and internal reporting systems

  • Discipline for noncompliance

  • Investigations and remedial measures

When building an effective compliance program, in addition to making sure that each of these seven key areas is adequately addressed, it is important to ensure that the program is designed to address all types of business arrangements that can expose health systems to regulatory risks. One area of health systems’ compliance programs that is often overlooked involves real estate arrangements between health systems and referral sources. Real estate arrangements with referral sources can pose regulatory risks for health systems. Therefore, health systems need to ensure that their compliance programs and the seven key areas identified above address real estate arrangements as well. Although each of the seven key areas of an effective compliance program is equally important, this paper will focus on structuring and administering a review and monitoring program for healthcare real estate arrangements.

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