Time-Share Lease Arrangements in Healthcare: Conversation with Ron Young from The Advisory Group

Episode Date: July 19, 2023

In this episode of Stark Integrity, Bob Wade (“Captain Integrity”) is joined by Ron Young, President and Owner of The Advisory Group, to discuss time-share lease arrangements in healthcare and the compliance considerations under the Stark Law.

Drawing on decades of experience in healthcare real estate valuation, Ron Young provides practical insights into how these arrangements work, why organizations use them, and how to structure them in a compliant and defensible manner.

What Are Time-Share Lease Arrangements?

Ron Young explains that time-share lease arrangements allow healthcare providers to share space, equipment, and related resources on a non-exclusive, as-needed basis.

These arrangements are often used when:

• A physician or specialist provides services at a location only part-time
• Organizations want to maximize use of existing space
• Flexibility is needed rather than a full-time lease

Unlike traditional leases, time-share arrangements operate more like a license to use space and services, rather than exclusive control of a property.

Why Healthcare Organizations Use Time-Share Arrangements

A key theme of the discussion is the practical value of these arrangements.

Ron Young notes that organizations use time-share leasing to:

• Expand access to care without significant capital investment
• Efficiently utilize underused clinical space
• Support visiting specialists or part-time providers

From a business perspective, these arrangements can be an effective way to align operational flexibility with patient needs.

Stark Law Implications

Ron Young emphasizes that time-share arrangements create a financial relationship between parties, which triggers Stark Law analysis.

He explains that:

• Physicians and healthcare entities must fit within a Stark exception
• The arrangement must be structured carefully to avoid prohibited referrals
• Compliance depends on meeting specific regulatory requirements

Because Stark is a strict liability statute, even technical missteps can result in violations.

Consistency in Methodology

A central takeaway from Ron Young’s insights is the importance of consistency.

He explains that:

• Organizations should apply a consistent methodology when valuing time-share arrangements
• Rental rates and fees must be determined in a defensible manner
• Inconsistent approaches can raise red flags during audits

Consistency helps ensure that arrangements are aligned with fair market value and compliance expectations.

Documentation and Monitoring

Ron Young highlights that documentation is critical to compliance.

He notes that:

• The arrangement must be clearly documented in writing
• The services, space, and resources provided must be specified
• Ongoing monitoring is essential to ensure the arrangement operates as intended

Without proper documentation and oversight, even well-structured arrangements may become difficult to defend.

Thinking Like a Patient

An interesting and practical perspective shared by Ron Young is the importance of thinking from the patient’s point of view.

He explains that:

• The arrangement should make sense in terms of patient access and care delivery
• Operational decisions should align with legitimate clinical needs
• Compliance should not be divorced from real-world patient impact

This perspective helps ensure that arrangements are not only compliant, but also aligned with the purpose of healthcare services.

The “Hotel Room” Analogy

To simplify a complex concept, Ron Young uses a hotel room analogy.

He explains that:

• Providers are essentially using space and services on an as-needed basis
• They are not leasing the space full-time
• Payment should reflect actual use, similar to renting a room for a specific period

This analogy helps clarify how time-share arrangements differ from traditional real estate leases.

Practical Takeaways

The key takeaway from Ron Young’s discussion is that time-share lease arrangements can be effective but require careful structuring and oversight. Organizations should:

• Ensure arrangements fit within a Stark Law exception
• Apply consistent and defensible valuation methodologies
• Clearly document all aspects of the arrangement
• Monitor usage and operations on an ongoing basis
• Align arrangements with legitimate business and patient care needs

Final Thoughts

This episode highlights—through Ron Young’s real estate and valuation expertise—that time-share lease arrangements offer important flexibility for healthcare organizations, but also carry meaningful compliance risk.

When structured thoughtfully, these arrangements can support access to care and efficient operations. However, success depends on discipline, documentation, and a clear understanding of regulatory requirements.

Click here to listen to this Stark Integrity Podcast Episode:
https://podcasts.apple.com/us/podcast/time-share-lease-arrangements-in-healthcare-conversation/id1588939373?i=1000621582138&l=fr-FR