What this checklist is for. An arrangement-level compliance review for a provider, health system, or supplier. Run it under counsel. For the doctrine, see Healthcare Fraud and Abuse: The Anti-Kickback Statute, the Stark Law, and the False Claims Act.

Phase 1—Build the arrangement inventory

  • Identify every referral source: physicians and their immediate family members, physician-owned entities, other providers who refer, and anyone in a position to generate federal health care program business.
  • Inventory every financial relationship with each—employment, independent contractor, medical directorship, call coverage, co-management, recruitment, leases of space or equipment, purchases, loans, joint ventures, ownership interests, professional services agreements, and grants.
  • Include indirect relationships that run through another entity, because the Stark indirect compensation analysis reaches them.
  • Include non-monetary benefits: meals, gifts, entertainment, continuing education, subsidized staff or equipment, free use of space, and marketing support.
  • Reconcile the inventory to accounts payable and payroll. Payments made outside any written agreement are the classic finding, and they only surface this way.
  • Record for each arrangement: the parties, the effective date, the term, the expiration, the compensation, the signature status, the location of the executed original, and the business owner responsible.
  • Flag every arrangement that is expired, unsigned, undocumented, or not in the inventory but paid.

Phase 2—Apply the Stark analysis

For each arrangement involving a physician (or immediate family member) and an entity furnishing designated health services:

  • Confirm whether the entity furnishes designated health services—for a hospital, essentially all inpatient and outpatient services.
  • Identify the financial relationship: ownership or investment interest, or compensation arrangement, direct or indirect.
  • Identify the exception relied on, by citation, and confirm every element:
    • A writing, signed by the parties, describing the arrangement (with the 90-day signature accommodation where applicable).
    • A term meeting the exception's requirement.
    • Compensation set in advance.
    • Compensation at fair market value.
    • Compensation not determined in a manner that takes into account the volume or value of referrals or other business generated.
    • Commercial reasonableness, evaluated as of the time of the arrangement.
    • Any exception-specific requirements.
  • Confirm the arrangement does not include per-click or percentage-of-revenue compensation where the exception prohibits it, particularly in space and equipment leases.
  • For a group practice relying on in-office ancillary services, confirm the entity meets the group practice definition, including the profit distribution rules, which prohibit distributing designated health services profits based on the physician's own referrals.
  • Record the analysis in writing, with the exception cited.

Why this matters. Stark is strict liability. There is no intent element and no good-faith defense; if no exception fits exactly, the referral is prohibited, the claim is not payable, and every claim submitted becomes a False Claims Act exposure.

Phase 3—Apply the Anti-Kickback analysis

  • Ask the operative question: could one purpose of this arrangement be to induce or reward referrals? Under the one-purpose test, that is sufficient even where the compensation is fair and the services are real.
  • Identify any safe harbor relied on, and confirm every element—partial compliance is no compliance.
  • Where no safe harbor fits, document a facts-and-circumstances analysis: the parties, the business rationale, how the counterparty was selected, whether referral volume influenced selection or compensation, and the risk factors OIG has identified.
  • Check the arrangement against OIG Special Fraud Alerts and advisory opinions addressing similar structures—speaker programs, telemedicine arrangements, physician-owned distributorships, and laboratory arrangements have each been the subject of guidance.
  • For laboratories, recovery homes, and clinical treatment facilities, apply EKRA, 18 U.S.C. § 220, separately—it reaches all payors and its employee exception is narrower than the AKS safe harbor, so commission-based sales compensation lawful under the AKS may violate it.
  • Consider requesting an OIG advisory opinion for a novel arrangement with meaningful exposure.

Phase 4—Test fair market value and commercial reasonableness

  • Obtain an independent valuation for anything unusual, before signing—not after a subpoena.
  • Confirm the valuation methodology and that the appraiser was given accurate facts.
  • Treat survey benchmarks as evidence, not a safe harbor; paying at the 90th percentile requires a documented reason.
  • Test commercial reasonableness in plain language: why the organization needs these services, why this person, why this quantity, and what it would do if there were no referrals.
  • Test for stacking. Aggregate every payment stream to each physician—salary, directorship, call coverage, co-management, lease, and any other—and confirm the total is defensible and that the same hours are not paid twice.
  • Confirm compensation is set in advance and does not vary with referrals, including through any bonus or incentive formula.
  • Confirm any productivity bonus is based on services personally performed.

Phase 5—Operational controls

  • Confirm services are actually delivered and documented—time logs, meeting minutes, deliverables, reports. This is the single most common failure in an otherwise compliant arrangement.
  • Confirm payment is contingent on documentation, so non-performance suspends payment automatically.
  • Calendar every term and renewal, with alerts at 120, 90, and 30 days, and a hard rule that payments stop when an agreement expires.
  • Route every new or amended arrangement with a referral source through a single approval function with authority to decline.
  • Maintain a central repository of executed agreements, with amendments.
  • Screen every employee, contractor, vendor, and physician against the OIG List of Excluded Individuals/Entities and the System for Award Management, at hire and monthly, and retain the results.
  • Confirm non-monetary compensation to physicians is tracked against the annual limit, and that any excess is repaid within the permitted window.
  • Confirm medical staff incidental benefits and other de minimis provisions are tracked.
  • Train the people who create arrangements—service line leaders, physician recruiters, and business development—because they are where non-compliant arrangements originate.

Phase 6—Monitor, and respond to findings

  • Audit a sample of arrangements annually against the inventory and against the documentation requirements.
  • Reconcile payments to agreements quarterly.
  • Track the hotline and complaint log for arrangement-related reports, and respond promptly and without retaliation.
  • When a problem is found, investigate promptly—the 60-day overpayment clock under 42 U.S.C. § 1320a-7k(d) runs from identification, and CMS expects reasonable diligence generally within six months.
  • Stop the conduct, and document the correction.
  • Quantify the affected claims, using sampling and extrapolation where necessary.
  • Choose the disclosure path deliberately: the OIG Self-Disclosure Protocol for conduct implicating the AKS; the CMS Voluntary Self-Referral Disclosure Protocol for Stark-only violations, where the settlement history is materially more favorable; or a simple refund for billing errors with no fraud dimension. Disclosing to the wrong body forfeits the benefit.
  • Fix the underlying control, and document the fix.

Common mistakes

  • No arrangement inventory, so nobody can answer what relationships exist.
  • Payments outside any agreement, discovered only by reconciling to accounts payable.
  • Expired agreements under which payments continued.
  • Missing signatures.
  • Per-click or percentage rent in space and equipment leases.
  • Stacked compensation across multiple agreements, individually defensible and collectively not.
  • No documentation of services delivered—the most common way a defensible arrangement becomes indefensible.
  • Valuations obtained after signing, or not at all.
  • Treating a failed safe harbor as automatically unlawful, or a failed Stark exception as merely risky—the two work in opposite directions.
  • Delaying the investigation after a problem is identified, which converts a repayment obligation into a knowing one.

Primary authority

Related

This checklist is educational and not legal advice. Fraud and abuse analysis is fact-specific, safe harbors and exceptions contain requirements not fully described here, and state analogues vary. Conduct any review under the direction of qualified healthcare regulatory counsel.