Stark Law Emerging Trends: Approval Process, FMV, 90th Percentile Compensation, and Independent Contractors

Episode Date: February 16, 2022

In this episode of Stark Integrity, host Bob Wade (“Captain Integrity”) takes a forward-looking approach and discusses emerging trends in Stark Law compliance, focusing on approval processes, fair market value (FMV), and the increasing scrutiny around compensation near or above the 90th percentile.

As enforcement continues to evolve, this episode highlights how regulators—and organizations—are thinking differently about compliance in practice.

A Shift Toward Process and Oversight

One of the key themes in this episode is the growing importance of internal approval processes. It’s no longer enough to have a compliant arrangement on paper—organizations are expected to demonstrate a structured, consistent process for reviewing and approving physician relationships.

This includes:

• Clear review protocols
• Defined approval authority
• Consistent application of FMV and commercial reasonableness standards

A strong process helps ensure decisions are not made in isolation and reduces the risk of inconsistent arrangements.

The Spotlight on FMV

As in prior episodes, FMV remains central—but here the focus shifts to how FMV is interpreted and applied in more aggressive compensation models.

Organizations may be tempted to push compensation higher to recruit or retain physicians. However, this episode stresses that higher compensation must still be:

• Fully supported by defensible data
• Tied to legitimate services
• Consistent with Stark principles

FMV is not just about staying within ranges—it’s about ensuring the methodology and justification hold up under scrutiny.

The 90th Percentile Discussion

A major point of focus in this episode is compensation at or above the 90th percentile of benchmark data.

While not automatically noncompliant, compensation at this level raises questions, including:

• What justifies compensation at the high end of the market?
• Are the assumptions and productivity metrics realistic?
• Is there a risk that compensation is indirectly tied to referrals?

Bob emphasizes that organizations must have clear, well-documented reasoning when operating at the upper end of compensation ranges.

Bridging Data and Judgment

This episode reinforces that compliance is not purely mechanical. Benchmark data is a tool—but it must be paired with informed judgment.

Organizations should:

• Understand the context behind survey data
• Avoid blindly selecting high-percentile benchmarks
• Consider specialty, geography, and operational needs
• Document why a particular compensation level is appropriate

Without this context, even data-supported decisions can appear questionable.

Practical Takeaways

The key takeaway from this episode is that how decisions are made is just as important as the decisions themselves. Healthcare organizations should:

• Strengthen internal approval and review processes
• Ensure consistent application of FMV principles
• Carefully evaluate high-percentile compensation
• Maintain detailed documentation supporting all decisions

These steps create a more defensible compliance framework and reduce regulatory risk.

Final Thoughts

This episode highlights the direction Stark compliance is heading: toward greater scrutiny, greater documentation, and greater accountability.

Emerging trends—particularly around approval processes and high-end compensation—underscore the need for discipline and consistency. For compliance professionals and healthcare leaders, staying ahead of these trends is essential.

In today’s environment, it’s not just about meeting the rules—it’s about proving you followed them the right way.

Click here to listen to this Stark Integrity Podcast Episode:
https://podcasts.apple.com/us/podcast/stark-law-emerging-trends-approval-process-fmv-90th/id1588939373?i=1000550515592&l=fr-FR